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FOREWORD
FROM THE AGENCY ADMINISTRATOR
Welcome to the 2011 edition of the Resolution 818g Travel Agent's Handbook, which contains the current text
of Passenger Agency Conference Resolutions that apply to IATA Accredited Agents. This Handbook will
normally be updated annually and is legally required to be provided to each Approved Location of an IATA
Agent.
The 818g set of Sales Agency Rules was adopted at the June 2007 Passenger Agency Conference to
address changing regulatory requirements in certain markets where the Passenger Agency Programme
operates without immunity.
Section 1 of this Handbook contains useful information specific to Resolution 818g countries. Further General
Information can be found on the dedicated Agenthome website (see below for details).
The Passenger Agency Conference Resolutions and locally established criteria, which together form part of
the Passenger Sales Agency Agreement, can be found in Sections 2 and 3 respectively of this Handbook.
The rules and criteria contained in Sections 2 and 3 are mandatory and must be adhered to by agents
participating in the Programme in the country/area governed by these rules.
The Manager of each Approved Location is recommended to draw this Handbook to the attention of staff
involved in selling international air transportation and issuing tickets. There are items of information in the
handbook which will strengthen travel agents' knowledge of their trade and make them more effective in their
work, to the advantage both of their employer and themselves.
The Agency Programme is constantly under review and is the subject of on-going dialogue between airlines
and agents. As a result, adjustments and improvements are progressively introduced in order to keep the
programme relevant to the industry's needs in the marketplace. The changes in this handbook incorporate all
the amendments made in 2010, a summary of which is provided in the Salient Aspects section below.
The Agenthome website (www.iata.org/agenthome) provides a wealth of information for IATA Accredited
Agents. In addition to the individual Passenger Agency Conference resolutions, Agents will also be able to
download copies of essential publications (Travel Agent's Handbook, BSP Manual for Agents) and other
reference material.
Agency Administrator
(email: Agenthome@iata.org)
ii
Foreword
REFERENCE MARKS USED FOR RESOLUTIONS
The following symbols placed against an item indicate changes from the previous edition:
Symbol
Meaning
Addition of a new item
Change to an item
Cancellation of an item
iii
TABLE OF CONTENTS
Page
Section 1 Information
Accreditation and Appointment Procedure ..............................................................................................
Changes Within an Agency Requiring Prior IATA Approval ....................................................................
1
3
Section 2 Passenger Agency Conference Resolutions This is part of the contract between
Travel Agents and IATA Members
Resolution
Number
800a
800f
800o
800x
800z
810z
818a
818g
820d
820e
822
824
824a
824c
824d
824r
824s
4
8
10
11
12
12
13
20
21
23
25
27
28
29
30
30
31
31
36
36
37
39
40
40
50
51
52
54
58
60
65
65
66
66
67
Table of Contents
Resolution
Number
828
830a
830d
838
842
850
850e
850m
850p
852
860a
862
866
878
880
880a
884
886
886a
886p
890
892
898a
Page
Remittance of Amounts Collected as Part or Full Special Advance Payment
for Special Fares ...............................................................................................................
Consequences of Violation of Ticketing and Reservation Procedures .............................
Reservations Procedures for Automated Accredited Agents ............................................
Change of Traffic Documents by Agents ..........................................................................
Network Agent ..................................................................................................................
Attachment A Airline Direct Web Sales Ticket Issuance for Agents ..........................
Industry Settlement Systems ............................................................................................
Issue and Processing of Agency Debit Memos (ADMs) ...................................................
Financial Securities ...........................................................................................................
Designation and Selection of Ticketing Airline ..................................................................
Passenger Agency Programme Global Joint Council (PAPGJC) .....................................
Joint Agent and Airline Consultative Meetings .................................................................
Definitions of Terms Used in Passenger Agency Programme Resolutions ......................
General Concurrence ........................................................................................................
Reduced Fares for Accredited Passenger Sales Agents .................................................
IATA Travel Agent Identity (ID) Card ................................................................................
Attachment A Recognition and Acceptance of the IATA Travel Agent ID Card .........
Attachment B Countries Where the IATA Travel Agent ID Card is in Circulation ......
Attachment C Application Form ..................................................................................
Reduced Fares for Delegates Attending Official Joint Industry Meetings ........................
Members' Group Vocational Training Trips for Accredited Passenger Sales Agents ......
Reduced Fares for Passenger Agents (IATA/UFTAA Professional Examinations) ..........
Reduced Fare Transportation for Persons Officially Travelling to Travel Agency
Commissioner Hearings ....................................................................................................
Card Sales Rules ..............................................................................................................
Disclosure of Positions Taken at an IATA Meeting ..........................................................
Electronic Reservation Services Providers .......................................................................
Section 3 Local Criteria for the Accreditation and Retention of Agents This is part of the
contract between Travel Agents and IATA Members
Local Criteria .............................................................................................................................................
67
68
69
69
70
76
77
77
79
80
80
82
82
87
89
95
96
97
100
101
102
104
104
105
107
108
109
APPLICATION
Any person or organisation may become an Accredited
Agent by submitting an application which is in the form of
answers to a questionnaire (see text of Resolution 800a
in this Handbook). Copies of the questionnaire and
answers to enquiries can be obtained from:
Americas
International Air Transport Association
703 Waterford Way Suite 600
Miami Florida 33126
United States of America
Email: miaaccreditation@iata.org
online
at:
ACTION ON APPLICATIONS
An applicant will be granted recognition as an IATA
Accredited Agent and consequently may be appointed to
represent Member Airlines, by meeting the qualifications
and criteria outlined in the Sales Agency Rules and
executing a Passenger Sales Agency Agreement. A
person whose application has been disapproved is told
the reasons for such action. The disapproved applicant
may request reconsideration or a review of the decision.
There is no limit to the number of applications that can be
made.
NUMERIC CODE
Each Approved Location of an Accredited Agent is
allocated an individual IATA numeric code and is entered
on the IATA Agency List. IATA Member Airlines are free
to appoint Accredited Agents from that list by depositing a
Statement of General Concurrence or individual Certificate of Appointment. Member Airlines participating in the
Billing and Settlement Plan (BSP) may, if they wish, grant
ticketing authority to individual agents to issue BSP
Standard Traffic Documents (STDs).
Asia-Pacific
Agency Accreditation Services, Asia/Pacific
International Air Transport Association
111 Somerset Road
#14-05 Triple One Somerset
Singapore 238164
Email: agencyservices-a3@iata.org
Europe
Agency Accreditation Services
IATA Service Centre Europe
Torre Europa
Paseo de la Castellana 95, 5th Floor
28046 Madrid
Spain
Registration/Licence
The business entity and/or its owners and managers must
have the requisite official registration and/or licence to
trade.
Email: AASEurope@iata.org
Finances
Only companies and firms that are financially sound will
be approved.
The applicant must submit independently produced
financial statements prepared in accordance with local
accounting practices.
To obtain a satisfactory evaluation, the applicant may be
required to provide further information or additional
financial support in the form of re-capitalisation, and/or
bank or insurance bond or guarantee.
Further details of the financial and other criteria are
detailed in Section 3 of this Handbook.
Premises
Security
An applicant must undertake to provide sufficient protection for its business, and for the supply of industry
Standard Traffic Documents in its possession, in accordance with the provisions detailed in Section 5 of Resolution 818g.
Business Standards
The applicant, or any of its managers, principal shareholders (or persons for whom they act as nominees),
directors or officers shall have no record of wilful violations of fiduciary obligations incurred in the course of
business nor be undischarged bankrupts.
Management
No person who is a director of or who holds a financial
interest or a position of management in the applicant shall
have been a director of, or had a financial interest or held
a position of management in, an Agent which has been
removed from the Agency List or is under notice of
default, and still has outstanding commercial debts, or in
such an Agent whose commercial debts were met solely
or in part by recourse to a financial bond or guarantee;
provided that the applicant may nevertheless be approved
if the Agency Services Manager is satisfied that such
person did not participate in the acts or omissions that
Under the terms of the Passenger Sales Agency Agreement entered into by each IATA Accredited Agent, an
Agent proposing to effect certain changes within its
agency must so notify the Agency Administrator through
the IATA Office. The details of the procedural requirements for cases of change of ownership, legal status,
name or location are shown in the Sales Agency Rules.
CHANGES OF OWNERSHIP/EQUITY OR
LEGAL STATUS
New owner(s) must be made at the same time to facilitate
approval of the change prior to its effective date.
CHANGES OF NAME
If an Accredited Agent wishes to change its name, or the
name under which any of its Approved Locations is
operated, it must give prior notice of and make application
for approval of the change.
CHANGES OF LOCATION
If an Accredited Agent wishes to change the place of any
of its Approved Locations it must give prior notice of and
make application for approval of the change.
Each Approved Location is inspected and this forms part
of the IATA accreditation process. When an pproved
Location changes, the Agent must inform the IATA Office
in writing before the change.
Note: Failure to give timely notice to IATA of changes
may jeopardize your status as an Accredited Agent or
that of the Approved Location.
RESOLUTION 800a
APPLICATION FORM FOR
ACCREDITATION AS AN IATA
PASSENGER SALES AGENT
PAC1(47)800a(except USA)
PAC2(47)800a
PAC3(47)800a
Expiry: Indefinite
Type: B
Yes
No
If Yes:
2.1.2.1 give name, address, telephone number, e-mail
address and IATA Numeric Code of IATA Approved Head
Office
2.1.2.2 Is the branch office:
wholly owned by this Head Office: Yes
No
No
No
No
Resolution 800a
Section 4 Business Entity
of Agency
4.5 If ASSOCIATION:
Name:
4.2 If PARTNERSHIP:
Name(s) and Title(s) of Partner(s):
Address(es), Telephone Number(s), Fax Number(s) and
E-mail Address(es):
% of time devoted to the agency business:
Financial Interest %:
4.3 If CORPORATION:
4.3.4
Yes
No
4.4 If TRUST:
Yes
Yes
No
Yes
No
No
Except where your organisation is a legal entity whose shares are listed
on a securities exchange or are regularly traded in an over-the-counter
market.
No
No
No
No
No
No
No
No
No
No
No
No
If yes, specify:
8.1.1 Name(s) of airline(s):
8.1.2 Scope of operation:
8.1.3 GSA territory:
8.2 Provide the names of individuals authorised to sign,
on behalf of the applicant, documents which relate to the
day-to-day operation of the travel agency:
8.3 Submit in accordance with the attached format, a
statement of your current international air passenger
transportation sales.
8.4 If approved as an IATA Agent, what do you estimate
will be the gross amount of international air transportation
sales of IATA carriers at the location for which approval is
requested:
8.4.1 in your first year?
8.4.2 in your second year?
Resolution 800a
8.5 Is your agency an IATA Registered Cargo Agent?
Yes
No
GOVERNMENT RESERVATIONS
UNITED STATES
In Order 73-8-115 dated 23 August 1973, the Civil Aeronautics
Board approved Resolution 810q (except USA) (now 800a)
subject to the condition that such approval shall not extend to
agencies located in the United States.
RESOLUTION 800f
AGENTS' FINANCIAL EVALUATION
CRITERIA
PAC1(47)800f(except USA)
PAC2(47)800f
PAC3(47)800f
Expiry: Indefinite
Type: B
It is RESOLVED that the following Agent financial evaluation criteria be applied as the baseline for establishment
and/or review of the local financial criteria in all markets,
subject to any local conditions that may apply.
Where a country has not developed its own specific
financial criteria the provisions of this resolution shall
apply until such time as local financial criteria have been
developed and approved by the PAConf for such country.
In the event of any conflict, contradiction or inconsistency
between the provisions of this Resolution and any provisions contained within the applicable Passenger Sales
Agency Rules for a country/area, the provisions of the
applicable Passenger Sales Agency Rules shall prevail.
1. GENERAL RULE
1.1 The following principles are to be applied as guidelines in the development of Agents' financial criteria.
1.2 Agents will be required to provide financial accounts
to demonstrate a financially sound status and the ability
to remain solvent and settle any bills. In the first two
years of trading an applicant will also be required to
provide a financial guarantee as detailed below.
1.3 After two years of trading as an Accredited Agent, the
Accredited Agent standing will be assessed against its
audited financial statements which will be evaluated as
outlined below. That evaluation will determine the amount
(if any) of a guarantee that must continue to be supplied.
Resolution 800f
4.2 Net Equity:
4.2(a) There must be Net Equity in the business. The
most recent audited (signed/certificated, where locally
required) financial statements, to be received no later
than 6 months following the latest accounting year-end of
the Agent concerned, must show a positive balance on
shareholders'/owners' funds. In computing the Net Equity,
adjustments must be made to write down to zero the
following:
4.2(a)(i) The balance of all intangible assets, including
goodwill,
4.2(a)(ii) All unamortised research and development
costs,
4.2(a)(iii) The value of all unquoted investments,
4.2(a)(iv) All encumbered Assets,
4.2(a)(v) All trading losses for the current financial period.
4.2(b) Net Equity must be greater than the sum of Long
Term Debt and other Long-Term Liabilities. Long term is
defined to be where repayment is due more than twelve
months after the end of the financial period.
statement
since the
the Agent
the total
5. CHANGES IN OWNERSHIP
5.1 Notification to the Accreditation department of a
change in ownership or change in control, other than in
the cases of corporations where the shares are regularly
Expiry: Indefinite
Type: B
Definitions
The definitions of terms and expressions used in this
Resolution are contained in Resolution 866. The use of
words and expressions in the singular shall, where the
context so permits, be taken to include their use in the
plural and vice versa. Paragraph headings are for ease of
reference only and do not form part of these Rules.
1. General
On-line Travel Agent applicants may be approved provided they can demonstrate they comply with all business
and legal requirements in a country to operate a travel
agency service and sell travel services to the public,
provided they meet and continue to meet the financial
criteria so established in the country, including where
appropriate and as determined by the Agency Administrator provision of a bank or insurance bond or guarantee
to cover sales at risk.
2. Qualifications
Applicants for approval as an on-line agent will be bound
by the relevant Passenger Sales Agency Rules applicable
in each country in which the applicant wishes to operate.
In addition the following rules will be applied.
2.1 Any entity applying for the status of on-line agent
must have an established physical Head Office duly
registered/licensed to operate as a business in a country
where the resolutions of the Passenger Agency Programme are applicable.
2.2 The applicant will be required to conclude a Passenger Sales Agency Agreement (PSAA) to cover each online agent location in a country. Where a location is a
separate legal entity that location will be required to
establish its own PSAA.
2.3 The applicant's business entity and/or its owners and
managers must have the requisite official registration
and/or licence to trade and offer travel agency services,
as prescribed by applicable law.
2.4 All locations established by the applicant must also
comply with the financial criteria of each country and any
local laws for operation of a travel agency.
10
Resolution 800x
EMERGENCY CHANGES TO
REPORTING AND REMITTANCE
PAC1(Mail A161)(Latin
America and the Caribbean,
except French Overseas
Departments)
RESOLUTION 800x
Expiry: Indefinite
Type: B
Definitions
The definitions of terms and expressions used in this
Resolution are contained in Resolution 866. The use of
words and expressions in the singular shall, where the
context so permits, be taken to include their use in the
plural and vice versa. Paragraph headings are for ease of
reference only and do not form part of these Rules.
1. when economic and financial conditions so warrant,
and when requested by a Member, Agency Programme
Joint Council, or Joint Agency Liaison Working Group, the
Conference may require Applicants to provide bank or
insurance bonds or guarantees; normal business fluctuations will be taken into consideration when determining
the level of such guarantees and Applicants will be
provided with a reasonable period of time to furnish such
guarantees;
11
RESOLUTION 810z
ELECTRONIC TICKETING
EXTENSION OF AGENCY
PROGRAMME IN THE PEOPLE'S
REPUBLIC OF CHINA
PAC1(46)800z(except USA)
PAC2(46)800z
PAC3(46)800z
Expiry: Indefinite
Type: B
DEFINITIONS
The definitions of terms and expressions used in this
Resolution are contained in Resolution 866.
1. Electronic Tickets as defined above and provided for in
this Resolution shall carry a form code in accordance with
the RP1720a. Appropriate measures must be taken to
ensure clear identification of the ticket as an electronic
transaction throughout all processing operations concerning such ticket.
2. Ranges of serial numbers shall be allocated to BSPs
and from BSPs to Agents in accordance with established
BSP procedures.
3. Electronic Tickets shall be reported and remitted in
accordance with BSP standard procedures.
4. An Electronic Ticket is deemed to have been issued at
the time that a serial number is assigned to the reservations record. The date of issuance must be recorded for
all transactions.
5. Standard Traffic Documents, as defined in the Passenger Sales Agency Rules, shall be understood to include
Electronic Tickets.
6. Where reference is made in the Passenger Sales
Agency Agreement and the Passenger Sales Agency
Rules to issuance of a Traffic Document, such reference
shall be understood to include issuance of an Electronic
Ticket.
7. At the time of issuing an electronic ticket Agents
must provide the passenger with all applicable legal
notices and a receipt must be generated and furnished to
the passenger by the Agent. When an Agent provides the
legal notices these must be in accordance with the
guidelines furnished in the BSP Manual for Agents.
12
PAC3(28)810z(People's
Republic of China)
Expiry: Indefinite
Type: B
Resolution 818a
3. subject to the foregoing, authorises ISS Management
of the IATA Billing and Settlement Plan in the People's
Republic of China to make available the services of BSPPeople's Republic of China for the reporting and remitting
of sales of domestic air transportation in the People's
Republic of China on behalf of IATA Members and other
domestic air carriers participating in BSP-People's Republic of China.
RESOLUTION 818a
EUROPE-ACCREDITED AGENT
PAC2(47)818a(EU/EEA &
Switzerland)
Expiry: Indefinite
Type: B
13
Section 1 Scope
Any legal person who meets the criteria described below
may submit an application to IATA for accreditation as a
Europe-Accredited Agent (EAA). Such criteria must continue to be met in order to ensure retention as a EAA.
1.1 Once accredited as such, an EAA shall automatically
acquire the right to open affiliated, subsidiary locations
and inplants within the EU, EEA and Switzerland (thereafter refer to as Locations), without the need to seek
individual accreditation for these entities on the condition
that criteria as described under Resolution 818a is met. If
the EAA is a Head Office (separate legal entity) or Branch
location then the EAA shall be obliged to complete an
Application Form as per Resolution 800a.
1.2 The Applicant for single European accreditation
(hereafter referred to as the Applicant) must provide
evidence of compliance in respect of the following;
Section 3 Registration/Licence
3.1 The Applicant and any of its Locations must be
officially registered on the same register as companies
established under the national law, of a Member State of
the EU/EEA or Switzerland and/or licensed to trade and
offer travel agency services, as prescribed by the national
commercial or fiscal law of that Member State.
3.2 The EAA must be registered in the same Member
State where it has its administrative head office.
Section 4 Staff
4.1 The Applicant and any of its Locations must have in
its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and report these to the BSP.
Section 5 Premises
5.1 The Applicant and any of its Locations shall be
identified as a place of business for a travel agency in
accordance with local commercial laws.
14
Section 7 Security
7.1 An Applicant shall undertake to provide sufficient
protection for:
7.1(a) all the Locations within its application for classification as a EAA;
7.1(b) the issuance of electronic tickets in accordance
with the provisions detailed in Section 2.6 of
Resolution 818g.
7.2 When notifying the creation of a new Location, the
EAA shall enclose a signed declaration that the premises
of the new Location are fully compliant with the security
criteria prescribed above.
7.2.1 In this declaration, the EAA shall acknowledge that
it does not benefit from a waiver of responsibility, in case
of theft or fraudulent use of traffic documents at the new
Location, if the premises of the said Location do not
EFFECTIVE 1 JUNE 2011
Resolution 818a
comply with the stipulated security provisions in accordance with 7.1.
7.2.2 IATA may initiate a review of the premises of the
new Location.
Section 8 Finances
8.1 Applications
An Applicant consisting of a legal entity duly registered in
a Member State for at least 12 months shall be submitted
to a financial assessment as provided under sub paragraph 8.2.
15
1.5 Date on which this head office began to operate as a travel agency.
Yes
No
2.
16
Numeric code:
If no, for any other type of office please describe
sole proprietorship
partnership
other (describe)
.................................................................................................................................................................................................
3.2 If PARTNERSHIP:
Name and Title of Partners
Financial Interest %
3.3 If CORPORATION
1) When and where incorporated:
2) Name of shareholders*
Address
* Except where your organisation is a legal entity whose shares are listed on a securities exchange or are regularly traded
in an over-the-counter market.
3) Names and Titles of Directors and Officers
3.4 IF NONE OF ABOVE APPLIES, fully describe the type of business entity, when and where organized and the names
and titles of persons holding a financial or managerial interest in the business, the nature and extent of their interest, their
address and telephone numbers and percentages of their time devoted to the agency business:
3.5 If the travel agency business is owned by another organization, please answer the following with respect to the parent
organization:
1. What is its legally registered name and address?
2. What is the principal business of this organization?
17
No
No
5.5 Staff
The EAA and its locations must have in its employment competent and qualified staff able to sell international air
transportation and correctly issue electronic travel documents and report these to the BSP.
Yes
No
5.6 Premises
The EAA and its locations shall be identified as a place of business for a travel agency in accordance with local
commercial laws. Each Location shall not be identified or represent itself as an office of an airline or group of airlines, nor
have a name the same as that of a Member of IATA, or of IATA, nor be in office space jointly occupied with an airline or
an airline's General Sales Agent.
Yes
No
No
If yes, please give the name(s) of the agency or agencies and location(s) involved, the relationship of the individual(s) with
the agency or agencies, the date of the bankruptcy or default and all pertinent details:
5.8 Security
All EAA locations shall undertake to provide sufficient protection for the issuance of electronic tickets and to comply with
minimum security requirements of the IATA Passenger Sales Agency Rules
Yes
No
SECTION 6 AUTHORITY
Please provide the names of individuals authorized to sign, on behalf of the EAA:
18
Country
Print/Type Name
Date
Title/Position
Schedule A
Please provide details - including the full legal name, trading name, manager-contact(s), telephone/fax/generic e-mail and
full address(es) and IATA numeric code(s) where applicable - of affiliated or subsidiary travel agency entities for which the
Europe-Accredited Agent will accept financial responsibility and is hereby applying for EAA status:
Country
Print/Type Name
Date
Title/Position
19
RESOLUTION 818g
PASSENGER SALES AGENCY RULES
PAC1(47)818g(except USA)
PAC2(47)818g
PAC3(47)818g
Expiry: Indefinite
Type: B
DEFINITIONS
GENERAL PRINCIPLES OF REVIEW
SECTION
COUNCIL
SECTION
2
ACCREDITATION
AGENCY
PROGRAMME
QUALIFICATIONS
JOINT
FOR
SECTION 3 PROCEDURES
SECTION 4 ISSUE OF STANDARD TRAFFIC
DOCUMENTS
SECTION 5 APPLICATION OF MINIMUM SECURITY
FOR PREMISES AND SYSTEMS
SECTION 6 REPORTING AND REMITTING
SECTION 7 (INTENTIONALLY LEFT BLANK)
SECTION 8 CONSEQUENCES OF DEFAULT
Mongolia
SECTION 9 CONDITIONS FOR PAYMENT OF
COMMISSION AND OTHER REMUNERATION
SECTION 10 CHANGE OF OWNERSHIP, LEGAL
STATUS, NAME OR LOCATION
SECTION 11 REVIEWS BY THE TRAVEL AGENCY
COMMISSIONER
SECTION 12 ARBITRATION
SECTION 13 MEASURES AFFECTING AN AGENT'S
STANDING
SECTION 14 AGENCY FEES
SECTION 15 INDEMNITIES AND WAIVER
ATTACHMENT A REPORTING AND REMITTING
ATTACHMENT B NOTICE OF CHANGE
ATTACHMENT C REPORTING & REMITTANCE
EXCEPTIONS
20
1.1.1 Composition
the Council shall consist of:
1.1.1.1 Members and Airlines designated from time to
time by the Agency Administrator, from those having
designated a nominee, bearing in mind the local market
conditions,
1.1.1.2 representatives, who are Accredited Agents,
selected from the agent community as coordinated by the
agency association(s). Agent representation shall constitute half of the Council's membership. Executive officers
of agent associations may attend the APJC as observers
at the discretion of the Chairman.
1.1.1.3 the Agency Services Manager as an ex officio
member; provided that the number of Members, Airlines
and Agents' representatives as provided in 1.1.1.1 and
1.1.1.2 above shall be determined by the Agency Administrator in proportion to their respective numbers in the
country or area of the Council and shall be included in his
recommendation to the Conference; provided further that
the total voting membership of the Council shall not
exceed 18;
21
recommendations for the annual budget of the accreditation activities of the Agency Services Office. The Director
General, in consultation with the Agency Administrator
shall review the recommendations and determine and
approve the final budget.
1.1.4 Procedures
the Council shall meet when required and shall elect its
Chairman from its membership. A simple majority of the
Council shall constitute a quorum and recommendations
shall be adopted, for consideration by the Conference,
when a majority of the air carriers and a majority of the
Agents present vote in favour of the proposal. Except as
provided herein, the Council shall establish its own
procedures and submit a report of its activities to each
meeting of the Conference.
1.1.4.1 the IATA Secretary shall formally call meetings of
the Council and shall establish the date and venue in
consultation with the Chairman. The Secretary shall
compile and distribute the agenda in a timely manner.
1.1.4.1.1 minutes of each meeting shall be compiled by
the Secretary and presented to the Chairman for
approval. Thereafter such minutes shall be circulated
promptly to the membership who shall be free to provide
comments to those minutes for consideration at the next
formal meeting of the Council where such minutes shall
also be tabled for approval of the Council.
22
Registration/Licence
Trading History
Staff
2.1.3 The applicant must have in its employment competent and qualified staff able to sell international air
transportation and correctly issue electronic travel documents and report these to the BSP.
Finances
2.1.4 The financial stability of the applicant is assessed in
relation to the funds at risk, taking into account net equity,
net current assets compared to the net cash sales of an
average prescribed reporting and remitting period. Such
evaluation shall be in accordance with established local
criteria, as adopted by the Conference and published in
the Travel Agent's Handbook.
2.1.4.1 The applicant must provide accounts showing a
satisfactory financial standing and ability to remain
solvent and pay bills. The applicant shall submit independently produced financial statements prepared in accordance with local accounting practices.
2.1.4.2 To obtain a satisfactory evaluation, the applicant
may be required to provide further information or
additional financial support in the form of re-capitalisation,
and/or bank or insurance bonds or guarantees to cover
the funds at risk.
Branch Locations in Other Countries
2.1.4.3 An applicant that opens Branch Locations in a
country, that is different from where the Head Office legal
entity is located, will be assessed against the financial
criteria established for the country of the Branch Location.
In such event the Agent will be required to submit the
financial documents of the Head Office legal entity.
Where the Agent is unable to meet the applicable local
criteria of the country of the Branch Location, it shall be
required to furnish additional security in the form of a
23
24
Section 3 Procedures
Upon request, the Agency Services Manager shall supply
each prospective applicant with an application form and a
copy of the IATA Travel Agent's Handbook containing
these Rules and other relevant information and guidance.
25
26
3.5.1.1 in the case of appointment by general concurrence, by so notifying the Agent in writing, with copy to
the Agency Administrator;
3.5.1.2 in other cases, by delivering to the Agent a notice
of termination cancelling the Certificate of Appointment.
27
28
29
30
31
32
33
34
35
Section 12 Arbitration
36
13.4.2 Suspension
13.4.2.1 when notice has been served by the Agency
Administrator that an Agent or Location is to be suspended:
13.4.2.1(a) the Agency Administrator shall so notify Members and BSP Airlines,
13.4.2.1(b) IATA shall appoint a Coordinator to withdraw
for the period of suspension all STDs deposited with the
Agent or with the Location,
13.4.2.1(c) the Agent may within 30 days of the date of
the suspension notice invoke the procedures set out in
Resolution 820e for review of the Agency Administrator's
action by the Travel Agency Commissioner and may also
apply for an interlocutory order staying the suspension
and preserving the status quo pending the outcome of the
review,
13.4.2.1(d) in all other respects the provisions of these
Rules and of other applicable Rules continue to apply to
the Agent or Location during the period of suspension;
13.4.3 Reprimand
when a reprimand is issued to an Agent under any of the
provisions of these Rules, the Agency Administrator shall
record it against the Agent and notify the Agent that this
has been done.
37
38
14.2 INVOICING
14.3.2 if an Agent whose Agreement has been terminated under Subparagraph 14.3.1 of this Paragraph subsequently remits the annual agency fee by March 31
following such termination, the Agency Administrator may,
if he is satisfied that the late payment was caused by
events beyond the Agent's control, reinstate the accreditation of an Agent. Such Agent's name shall then be
reentered on the Agency List and a new Sales Agency
Agreement shall be executed;
14.3.3 in the event an Agent refuses to remit the correct
level of application fee, or administration fee, then the
Agency Administrator shall promptly notify the Agent in
writing that its Sales Agency Agreement shall be terminated within 30 days for failure to pay fees due;
14.3.4 if an Agent whose Agreement has been terminated under Subparagraph 14.3.3 of this Paragraph subsequently remits the correct fees within 30 days, following
such termination, the Agency Administrator may reinstate
the accreditation of an Agent. Such Agent's name shall
then be re-entered on the Agency List and a Sales
Agency Agreement shall be executed or re-instated;
14.3.5 an Agent may within 30 days of the date of the
notice in Subparagraphs 14.3.1 or 14.3.3 invoke
the procedures set out in Resolution 820e for review of
the Agency Administrator's action by the Travel Agency
Commissioner and may also apply for an interlocutory
order preserving the status quo pending the outcome of
the review. Before granting an interlocutory order under
this Subparagraph, the Commissioner shall require the
Agent to provide a bank or other financial guarantee.
39
RESOLUTION 818g
Attachment A
SECTION 2. CONSEQUENCES OF
DEFAULT TO BSPs AND TO BSP AIRLINES
2.1 Determination of Agent's Indebtedness to BSP
Airlines
2.2 Settlement of Amounts Due
2.3 Review by the Agency Administrator
2.4 Effects of Retention after Default
2.5 Review by Travel Agency Commissioner
40
1.5 BILLINGS
1.5.1 the Data Processing Centre shall compute and
prepare a Billing in respect of each Approved Location in
accordance with the requirements of the Conference.
Such Billings shall incorporate all Accountable Transactions reported by the System Provider with respect to
each Approved Location of an Agent;
1.5.2 the frequency at which Billings shall be rendered to
Agents shall be established by the Conference;
1.5.3 Where a BSP allows ticket issuance in more than
one currency a billing will be produced for each currency
used.
41
42
the deadline for the Clearing Bank's receipt for such from
the Agent is the close of business on the first day it is
open for business following the day of the Agency
Administrator's demand;
1.7(d) A notice of irregularity or declaration of default
shall be in writing and set out the specific circumstances
giving rise to the irregularity or default.
1.7.1 Charges
The Conference may, subject to the provisions set forth in
this Resolution, implement a programme of cost recovery
charges to be levied on Agents under the following
circumstances:
43
44
1.7.8.4 and in circumstances where the Agency Administrator is notified by a BSP Airline of irregular activity by
the Agent, which causes chargeback under Resolution 890, to immediately invoke default action as
described under paragraph 1.10 of these rules.
disputed ADM by
resolved, despite
the Agent, such
will be withdrawn
45
46
47
48
49
Will such change affect the managers and staff at the Approved Locations under this change? If so,
give details.
Have any of the new owners, officer (directors), managers or any individual having authorisation to
act or sign on behalf of such firm been involved in bankruptcy or default proceedings? If so, give
details.
Will the change of ownership cause direct or indirect relationship with an organisation holding
General Sales Agency appointment from a BSP Airline? If so, give details.
The Transferor has informed the Transferee of the need to comply with Sales Agency Rules if the
Transferee wishes to be entered on the IATA Agency List as an Accredited Agent.
In accordance with one of the requirements of the Sales Agency Rules, the Transferee hereby undertakes
that it accepts joint and several liability with the Transferor for any outstanding obligations of the
Transferor under its Sales Agency Agreement as at the date the transfer of ownership takes place.
Where the Transferor is employed by, or retains a financial or beneficial interest, directly or indirectly, in
the agency following the change of ownership, the undersigned Transferee knows and hereby agrees to
accept responsibility for any violation by the Transferor of his Sales Agency Agreement which may have
occurred within a period of two years immediately prior to the change of ownership as if such violation
were a violation of the Transferee's Sales Agency Agreement.
50
51
Expiry: Indefinite
Type: B
RESOLVED that,
1. the Office of Travel Agency Commissioner, (the Commissioner) is hereby established and shall be funded as
provided below.
2. at least one Commissioner shall be appointed for each
IATA Conference Area.
3. any person may submit names of candidates for
vacant Commissioner positions to the Director General of
IATA. Industry representatives, including the Chairman/
CEO of UFTAA and the Chairman of WTAAA, will
evaluate each candidate and make appropriate recommendations to the Director General. The Commissioner will thereafter be appointed on the joint authority of the Director General and the Chairman/CEO of
UFTAA and/ or the Chairman of WTAAA, such appointment to be for a period of not less than two years,
renewable by mutual agreement. A serving Commissioner
shall not leave office before a successor has been
appointed.
4. Deputy and Substitute Travel Agency Commissioners
may be appointed, to meet the demands of the office, in
which event the appointment process shall be as for the
Commissioner described above. In this Resolution,
the term Commissioner shall be deemed to include the
Travel Agency Commissioner, Substitute Travel Agency
Commissioner and the Deputy Commissioner.
5. in the discharge of their duties the Commissioners
shall be impartial and shall not be subject to the direction
or supervision of IATA, any Member, Accredited Agent or
association of travel agents, or any of their employees or
officers.
6. the term of office of a Commissioner may be curtailed
by the Director General the Chairman/CEO of UFTAA and
the Chairman of WTAAA acting jointly, upon the recommendation, for cause, of the appropriate body of
industry representatives.
7. the costs of the Office of the Travel Agency Commissioner shall be borne in equal proportions by Members
and by Accredited Agents.
7.1 each IATA Accredited Agent shall be called upon to
contribute towards the Commissioner fund in an amount
determined by the Conference, such amount being not
less than USD 5.00 nor more than USD 10.00, or
acceptable equivalent per Approved Location, per year as
a regular contribution. The total amount of contributions
paid by Members collectively in a given year shall be
equal to the total amount of contributions paid by IATA
Accredited Agents collectively in the same year. All such
contributions shall be paid into the Travel Agency
52
RESOLUTION 820d
Attachment A
Travel Agency Commissioner Profile
1. The Travel Agency Commissioner is an independent
arbiter appointed jointly by the International Air Transport
Association (IATA), the Universal Federation of Travel
Agency Associations (UFTAA) and the World Travel
Agency Associations Alliance (WTAAA) to conduct
reviews and act with respect to decisions and/or actions
affecting Agents and applicants under the IATA Agency
Programme.
1.1 The office of the Travel Agency Commissioner is
established under the terms expressed in Resolution 820d.
1.2 The procedures under which the Travel Agency
Commissioner operates are contained in IATA Resolution 820e.
2. IATA, UFTAA and WTAAA will assess applicants for
the office of the Travel Agency Commissioner against the
following profile:
The ideal candidate will meet the following criteria:
1. experience in the travel industry ideally gained from
previous employment with an airline or travel agency;
2. at the time of application the applicant must not be
employed or have any involvement with an airline,
travel agent, agency association or IATA;
3. good knowledge of the IATA Passenger Agency
Programme and the associated rules and regulations
or a demonstrated ability to acquire knowledge of the
Programme;
4. experience in dispute resolution and/or legal background;
5. independent contractor not associated with an airline,
IATA or travel agency;
6. fluent in written and oral English with the same skills
in at least one other major language;
7. ability to travel at short notice.
2.
3.
53
4.
5.
6.
7.
8.
RESOLUTION 820e
REVIEWS BY THE TRAVEL AGENCY
COMMISSIONER
PAC1(47)820e(except USA)
PAC2(47)820e
PAC3(47)820e
Expiry: Indefinite
Type: B
54
Resolution 820e
1.1.7 an Agent from whom stocks of Standard Traffic
Documents have been withdrawn by ISS Management, or
its representative, pursuant to the Accounting Irregularity
Safeguards provisions of Resolution 818g or 832, as
applicable; provided that any review initiated under this
subparagraph shall be to decide on any interim relief
pending a redetermination of the eligibility of the Agent or
the Location to be retained on the Agency List under
Paragraph 1.3 of this Resolution;
1.1.8 an Agent who considers that its commercial survival
is threatened by a Member's individual decision preventing it from acting as Agent for, or from issuing Traffic
Documents on behalf of, such Member;
1.1.9 an Agent who is aggrieved by an impending
amendment to its Passenger Sales Agency Agreement;
1.1.10 an Agent who considers that the Agency Administrator (as defined) has not followed correct procedure as
delegated by the Passenger Agency Conference, to that
Agent's direct and serious detriment in order to determine
whether the decision under review was made in accordance with applicable Resolutions and based on credible
fact.
55
56
Resolution 820e
award to cover reasonable costs incurred by the Respondent and the Commissioner;
2.5 except as the Commissioner may otherwise direct in
writing, any person who is not a party, or a witness, who
desires to make relevant information available to the
Commissioner in connection with a pending review shall
do so only through one of the Parties. The party concerned shall promptly forward such information in writing
to the Commissioner, with a copy to the other party. Such
person shall be subject to cross examination;
2.6 except for good cause stated in writing, the Commissioner shall schedule each review proceeding not later
than 45 days after receipt of the request for review. The
Commissioner shall normally render his decision within
30 days after the close of the record in the proceeding.
2.7 in making each decision, the Commissioner shall be
bound by the provisions of the applicable Resolutions,
and may only make findings of fact and conclusions in
accordance with those Resolutions.
2.8 the decision shall be in writing and shall include all
such findings and conclusions and with respect to reviews
conducted under Paragraph 1.1 of this Resolution any
conditions imposed by the Commissioner. With respect to
review proceedings instituted pursuant to Paragraph 1.3
of this Resolution, the decision shall be in writing and
shall include all such findings and conclusions and any
penalty imposed pursuant to Section 3 of this Resolution.
2.9 a signed copy of the decision shall be served on each
party. Subject to action taken under Section 4 of this
Resolution, the Commissioner's decision shall be final
and binding on the Parties, including Members of IATA.
and
57
RESOLUTION 822
IATA NUMERIC CODE
PAC1(47)822
PAC2(47)822
PAC3(47)822
Expiry: Indefinite
Type: A
58
Resolution 822
3.1.2 all other categories subscribing to a recognised
IATA industry scheme shall be allocated a designator
based on the Numeric Code structure;
3.1.3 blocks of IATA Numeric Codes shall be set aside
for allocation in the United States to entities that qualify
for such codes under the terms of this Resolution;
3.1.4 upon request of a Member or of a non-IATA airline,
the Agency Administrator shall allocate IATA Numeric
Codes to such Member's or airline's own sales offices, to
Traffic Documents-issuing offices of such Member's or
airline's Passenger General Sales Agents, or airport
handling agents which are not themselves IATA Members; provided that in the case of a request from a nonIATA airline, the cost of allocation and publication of the
IATA Numeric Code shall be for the account of the
requesting airline.
3.1.5 IATA Numeric Codes and designators shall be
allocated according to the type of Location or user.
3.1.6 A change of Location or category may require the
withdrawal from use of the IATA Numeric Code or
designator, and the allocation of a different one.
4.1.2(b) Examples:
AGENT X Y Z
20-2 0000 3
30 APR 90
RUE DE LYON 8
GENEVA/SWITZERLAND
AGENT X Y Z
20-2 0000 3
30 APR 90
RUE DE LYON 8
GENEVA/CH
4.1.2(c) Exception:
when passenger accountable forms are validated by
imprinter, the location information may be divided for
entry in more than one position, with the order sequence
varied as well,
4.1.2(d) Examples:
20-2 0000 3
AGENT X Y Z
30 APR 90
RUE DE LYON 8
GENEVA/SWITZERLAND
20-2 0000 3
AGENT X Y Z
30 APR 90
RUE DE LYON 8
GENEVA/CH
Section 7 PUBLICATION
the IATA Numeric Codes allocated pursuant to Subparagraphs 3.1.1, and 3.1.3 of this Resolution shall be
published by the Agency Administrator as directed by the
Passenger Agency Conference; ARC and IATAN shall be
responsible for the publication of IATA Numeric Codes
made available to them pursuant to Subparagraph 3.1.2
of this Resolution.
59
RESOLUTION 824
PASSENGER SALES AGENCY
AGREEMENT (VERSION II)
PAC1(22)824(except USA)
PAC2(22)824
PAC3(22)824
Expiry: Indefinite
Type: B
1. EFFECTIVENESS
this Agreement shall become effective between the Agent
and the Carrier upon appointment of the Agent by such
Carrier in accordance with the Sales Agency Rules in
effect in the country(ies) of the Agent's Location(s). Upon
coming into effect this Agreement, including any amendments thereto, shall have the same force and effect
between the Carrier and the Agent as though they were
both named herein and had both subscribed their names
as parties hereto.
60
Resolution 824
2.1(a)(iv) other applicable IATA Resolutions;
2.1(b) such Rules, Resolutions and other provisions as
amended from time to time are deemed to be
incorporated in this Agreement and made part hereof and
the Carrier and the Agent agree to comply with them;
2.2 the Agent acknowledges that it has received a copy
of the current edition of the Handbook and has
acquainted itself with the contents thereof. The Agent
specifically acknowledges that it has read and understands the contents of the Handbook, including but not
limited to those dealing with: indemnities and waiver;
custody, issuance and security of Traffic Documents; the
reporting and remitting procedures; and the arbitration
procedures;
2.3 the Agency Administrator shall provide the Agent with
subsequent editions of the Handbook and all amendments thereto. The Agent shall be notified by the Agency
Administrator of any amendments to the contents of the
Handbook and such amendments shall be deemed to be
incorporated herein unless within 30 days of receipt of
such notification the Agent terminates this Agreement by
notice in writing to the Agency Administrator;
2.4 the terms and expressions used in this Agreement
shall, unless the context otherwise requires, have the
meanings respectively provided for in the Sales Agency
Rules. In the event of any conflict, contradiction or
inconsistency between any provisions with which the
Agent is required to comply under Subparagraph 2.1 of
this Paragraph, and any of the provisions of this Agreement, the provisions of this Agreement shall prevail.
and conditions applicable to the sale of such transportation as published in that other carrier's tariff;
3.5 with respect to previously issued Traffic Documents
the Agent, its officers or employees shall issue, accept,
reissue, validate or revalidate (including by means of
reservation alteration stickers) all such Traffic Documents
in accordance with the Carrier's tariffs, conditions of
carriage and written instructions;
3.6 the Agent shall transmit to the Carrier such specific
requests or particulars in connection with each customer
as may be necessary to enable the Carrier to service
each customer efficiently.
5. AGENCY DESIGNATION
the Agent shall not represent itself as a General Agent or
use any other designation, such as Air Lines Ticket
Office, which would indicate or imply in any way that its
office is an office of the Carrier or any Member.
61
62
8. REFUNDS
the Agent shall make refund only in accordance with the
Carrier's tariffs, conditions of carriage and written instructions, and against receipt. The Agent shall only refund
Traffic Documents issued by such Agent.
9. REMUNERATION
for the sale of air transportation and ancillary services by
the Agent under this Agreement the Carrier shall
remunerate the Agent in a manner and amount as may
be stated from time to time and communicated to the
Agent by the Carrier. Such remuneration shall constitute
full compensation for the services rendered to the Carrier.
EFFECTIVE 1 JUNE 2011
Resolution 824
10. RECORDS AND INSPECTION
the Agent shall maintain adequate records and accounts,
together with supporting documents, recording the details
of all transactions effected under this Agreement. Such
records, accounts and documents shall be preserved by
the Agent for at least two years from the date of the
transactions to which they relate and shall be available for
inspection or for copying by the Carrier whose Traffic
Documents have been issued.
relinquishes
its
IATA
Approval/
11. CONFIDENTIALITY
11.1 the Carrier agrees that the Carrier and its officers,
employees and agents, including ISS Management where
applicable, will treat information and data relating to the
Agent coming into its possession as confidential except to
the extent required by law;
11.2 notwithstanding Subparagraph 11.1 of this Paragraph, the Agent agrees that the Carrier, its officers,
employees and agents, including ISS Management where
applicable, may collect, process and disclose to other
parties participating in the BSP, except to other Agents,
such information and data for purposes of financial
assessment of the Agent or of the orderly operation of
agency administration or of the Billing and Settlement
Plan;
11.3 the Agent agrees that the Agent and its officers,
employees and any other person acting on the Agent's
behalf will treat information and data relating to the
Carrier coming into its possession as confidential except
to the extent required by law.
13. TERMINATION
13.1 this Agreement or its application to a specific
Location(s) of the Agent shall be terminated if, in accordance with the Sales Agency Rules:
14. ARBITRATION
if any matter is reviewed by arbitration pursuant to the
Sales Agency Rules, the Agent hereby submits to arbitration in accordance with such Rules and agrees to
observe the procedures therein provided and to abide by
any arbitration award made thereunder.
63
by
18. SEVERABILITY
if any provision of this Agreement is held to be invalid,
this shall not have the effect of invalidating the other
provisions which shall nevertheless remain binding and
effective between the parties.
64
Resolution 824c
RESOLUTION 824a
RESOLUTION 824c
PAC1(29)824a(except USA)
PAC2(29)824a
PAC3(29)824a
Expiry: Indefinite
Type: B
PAC3(26)824c(People's
Republic of China)
Expiry: Indefinite
Type: B
65
RESOLUTION 824r
REFUNDS TO AGENTS
PAC1(24)824d(except USA)
PAC2(24)824d
PAC3(24)824d
Expiry: Indefinite
Type: B
PAC1(44)824r(except USA)
PAC2(44)824r
PAC3(44)824r
Expiry: Indefinite
Type: B
Section 1 REFUNDS
1.1 Members are recommended to authorise the use of
GDS refunding applications for totally unused traffic
documents. In all cases Members shall expedite refunds
on unused or partly used Traffic Documents in accordance with the following practices:
66
Resolution 828
RESOLUTION 824s
RESOLUTION 828
REMITTANCE OF AMOUNTS
COLLECTED AS PART OR FULL
SPECIAL ADVANCE PAYMENT FOR
SPECIAL FARES
PAC1(25)824s(except USA)
PAC2(25)824s
PAC3(25)824s
Expiry: Indefinite
Type: B
RESOLVED that,
1. the indemnities and waivers given by the Agent and
the Carrier in respect of lost, stolen, misused or fraudulently issued Traffic Documents, as set forth in the Sales
Agency Rules, shall be those in effect as at the date of
execution of the Agent's Passenger Sales Agency Agreement in the form prescribed in Resolutions 824,
designated in Paragraph 3 hereof, and shall not be
amended or varied except as agreed between the Agent
and the Carrier.
2. the Resolutions designated in Paragraph 3 hereof shall
remain effective only if this Resolution becomes and
remains effective, and if any of these Resolutions is
disapproved, rescinded or a Government approval is
withdrawn, all such Resolutions shall simultaneously be
voided or rescinded, as the case may require.
3. Resolutions:
PAC1(25)824 (except USA)
PAC2(25)824 (except EU and EEA countries)
PAC3(25)824
PAC1(43)828(except USA)
PAC2(43)828
PAC3(43)828
Expiry: Indefinite
Type: A
1. WHERE PART-PAYMENT IS
REQUIRED
1.1 an MCO (or, if the part-payment is made directly
to the Member, such Member's own permissible
accountable document or receipt) shall be issued in
respect of the amount collected. If the collection is made
by an Agent, the MCO shall be included in such Agent's
next Sales Report in accordance with applicable reporting
procedures. The exchange coupon of the MCO (or its
equivalent if the Member's own accountable document or
receipt is used) shall be delivered to the prepayer;
1.2 the Member or its Agent:
1.2.1 shall collect by the applicable specified date, the
outstanding balance; withdraw the MCO exchange coupon (or other document); and issue the ticket(s).
1.3 If this balance collection and ticket issuance is made
by an Agent, the transaction shall be included in such
Agent's next Sales Report in accordance with applicable
reporting procedures.
2. where full payment of the fare is required by a
specified date, such payment must be effected and the
ticket(s) (or Member's own permissible accountable document or receipt) shall be issued not later than such date.
3. the normal reporting and remittance procedures provided for in the Sales Agency Administration Rules shall
apply in respect of all advance payment collections and
issuances to which the terms of this Resolution apply.
Editorial Note: Any references to MCO in the provisions contained in this Resolution mean the Neutral
Multiple Purpose Document (MPD).
67
Expiry: Indefinite
Type: B
68
Resolution 838
RESOLUTION 830d
RESOLUTION 838
PAC1(07)830d(except USA)
PAC2(07)830d
PAC3(07)830d
PAC1(46)838(except USA)
PAC2(46)838
PAC3(46)838
Expiry: Indefinite
Type: B
RESOLVED that,
1. when an Accredited Agent (hereinafter Agent) is
connected to a Member's automated reservations system,
the Agent is acting on behalf of the Member(s) in using
that system and, therefore, shall adhere to the appropriate reservations procedures contained in IATA Resolutions. These procedures shall be provided by the Member(s) to the Agent.
2. the Agent shall request or sell airline space and/or
associated services of a passenger handling nature only
when the Agent has a request to do so from a customer.
The Agent shall make such transaction in accordance
with his system provider agreement.
3. the Agent shall ensure that the reservations booking
designator used in booking space corresponds to the
applicable fare quoted to the customer.
4. Members must have the passenger's contact in the
event there are any operational difficulties or it is either
too late or not practical to advise the Agent. For this
reason, in addition to its own telephone contact, the
booking Agent shall enter in the Passenger Name Record
(PNR) the customer's home and/or business telephone
contact whenever available.
5. the Agent shall notify the customer of the reservations
status of all segments and associated services and of any
changes thereto.
6. all reservations for a specific itinerary and changes
thereto shall, whenever possible, be processed through
one Member. When this is not possible, the Agent shall
inform each Member involved that the reservation is in
connection with an itinerary.
7. the Agent shall ensure that the ticket will be issued in
accordance with the reservations status of each segment
and in accordance with the applicable ticketing time limit.
8. the Agent shall be solely liable for the consequences
of its failure to comply with any Resolution governing
reservations.
Expiry: Indefinite
Type: B
1. GENERAL
1.1 at a passenger's request, an Agent may effect a
change of reservation or effect a rerouting (without
changing the point of origin) under the conditions specified in the following paragraphs. In such case, the Agent
shall ensure that all space originally reserved in respect
of the segment affected by the change is promptly
cancelled.
1.2 all documents presented for reissue shall be checked
against the official record of Traffic Documents which are
not to be honoured, to the extent such record is locally
accessible to the Agent.
2. CHANGE OF RESERVATION
ELECTRONIC TICKETS ONLY
alterations to electronic tickets/flight coupons shall be
made in accordance with Members specific instructions
and as provided for by the automated ticketing systems.
3. VOLUNTARY REROUTING
(change made at passenger's request)
3.1 an Agent shall not reissue a traffic document
3.1.1 when the document presented for reissue was
issued or originally issued in currencies or countries with
exchange control restrictions,
3.1.2 when the document presented for reissue is not
valid or is restricted for reissue by the fare rule, the
discount applied or the form of payment or shows any
other remarks restricting issue,
3.1.3 when the effect of reissue would be to change the
type of fare (e.g. normal fare into excursion fare) or grant
a reduction (e.g. normal fare into youth fare) for an
itinerary involving a sector already flown;
3.2 in all other cases, an Agent may reissue a traffic
document, provided authorisation to do so has been
requested from and given by the issuing airline shown on
the document presented for reissuance, or by the airline
shown in the Original Issue box. Such authorisation is
not required if a document is reissued, without
changing the routing, only to change the carrier named
69
4. INVOLUNTARY REROUTING
(change due to special airline operational circumstances)
4.1 in the case of involuntary rerouting, reissuance of
tickets and change of reservations data on the ticket are
restricted to air carriers;
4.2 reissuance of involuntarily rerouted tickets and
change of reservations data on such tickets are also
restricted to air carriers.
Editorial Note: Amendments to Resolution 838 are
subject to unanimous concurrence by the Passenger
Services Conference.
RESOLUTION 842
NETWORK AGENT
PAC1(45)842(except USA)
PAC2(45)842
PAC3(45)842
Expiry: Indefinite
Type: B
1. DEFINITIONS
In this Resolution:
NETWORK AGENT means a group of Accredited Passenger Sales Agents, or Person, which meets the following
criteria:
(a) the same corporate head office to which they are
ultimately subordinate;
(b) effective control of the Agents and Locations specified within its application for Network Agent classification;
(c) majority ownership, either directly or indirectly, of
51% or more in all of those Agents and Locations,
and whose names are entered on the Agency List in
either
(i) three or more countries, OR
(ii) a minimum of one hundred Head Office and
Branch Locations, if in less than three countries,
OR
(iii) which, if in a single country, contributes 10% or
more of that country's BSP net sales;
AND
(d) has an Established BSP Performance, as defined in
Resolution 866;
(e) accepts full financial responsibility to IATA and its
Members for the performance of all of the Locations
70
Resolution 842
within its application for classification as Network
Agent, and for any Locations subsequently added;
(f) will provide any financial guarantees as may be
determined by IATA;
(g) must include all its Approved Locations in all of the
country/countries contained within its application;
(h) confirms that all its Locations meet all the criteria
mandated for accreditation required within the applicable Passenger Sales Agency Rules, and
(i) understands its classification as Network Agent is
limited to the country/countries contained within its
application.
The use of words and expressions in the singular shall,
where the context so permits, be taken to include their
use in the plural and vice versa.
3.1.2 Processing
3.1.2.1 upon receipt, the Agency Services Manager shall
promptly consider whether such application is complete. If
any of the required information or fees has not been
included with the application, the Agency Services Manager shall so inform the applicant;
71
4. CHANGE OF OWNERSHIP
4.1 Where a change of ownership materially affects the
classification of the Agent as a Network Agent, IATA
reserves the right to either require a re-application to this
classification, or to rescind the membership of this classification.
5. AGENCY FEES
5.1 Annual Agency Fees
5.1.1 The sum of the applicable annual agency fees due
for the Network Agent classification shall be quoted, in
US Dollars as one collective amount, but may be payable,
at the discretion of IDFS, at an equivalent rate in a local
currency.
5.1.2 The combined Annual Agency Fees shall include all
agreed Approved Locations nominated by the applicant,
plus any additional Branch Locations subsequently added
to the Agency List during the year for which the fee
applies.
5.1.3 The combined Annual Agency Fees shall also
include all Changes of Name, and Changes of Location
that may apply in the year for which the fee applies.
6. REVIEWS
6.1 An Agent whose application for classification as a
Network Agent, or a Network Agent whose application for
an additional location has been rejected may, within
30 calendar days of the date of the Agency Services
Manager's notice, request the Agency Services Manager
to reconsider his decision. Such request shall be made in
writing, stating the grounds for a reconsideration.
72
Section 1 Requirements
1.1 The applicant satisfies the Definitions of Network
Agent and Established BSP Performance as provided for
in this Resolution or elsewhere.
1.2 Applicants are required to certify that any statements
made in respect of this application, and future
applications for Approved Locations, are true and trustworthy in all respects.
1.3 Applicants are required to meet the financial guarantees that shall be determined by IATA.
1.4 Applicants will be required to make payment of their
Annual Agency Fees, when due, as one consolidated
amount. The fee, quoted in US Dollars, will include:
(i) all existing Approved Locations covered by this
application,
(ii) all future Branch Locations including their entry,
application, and annual fees approved in the same
fee year in the country/countries covered by this
classification,
(iii) all future Changes of Name and Changes of Location
approved in the same fee year in the
country/countries covered by their Network Agent
classification,
(iv) automatic approval of all future Branch Location
applications in the country/countries covered by this
application, subject to the provision of all of the
required information, and provided that all applicable
accreditation criteria are met.
1.5 The provisions of 1.4 (ii), (iii) and (iv) shall not apply
should such future applications be either incomplete or
subsequently rejected. In such instances, re-applications
shall be subject to the applicable Passenger Sales
Agency Rules, and fees.
1.6 A one-off Application Fee, as advised by IATA, is
required with this application.
73
..........................................
Signature
..........................................
(Name of Applicant)
..........................................
Title
..........................................
74
75
6.1 All other conditions for use of the BSP Airline's web
application are outside of the scope of these resolutions
and are a matter for the bilateral agreement to be
established between the parties. The existence, but not
the content, of such agreements will be advised to the
BSP.
76
Resolution 850m
RESOLUTION 850e
RESOLUTION 850m
PAC1(42)850e(except USA)
PAC2(42)850e
PAC3(42)850e
Expiry: Indefinite
Type: B
1. INTRODUCTION
1.1 The ADM serves to notify an Agent that unless there
is some justification to the contrary, the Agent owes the
issuing BSP Airline the amount shown on the ADM for the
reasons indicated.
1.2 ADMs are a legitimate accounting tool for use by all
BSP Airlines to collect amounts or make adjustments to
Agent transactions in respect of the issuance and use of
Standard Traffic Documents issued by the Agent. Alternative uses of ADMs may exist provided that consultation
has taken place either individually with the Agent or a
local representation of Agents, or through the applicable
local joint consultative forum.
1.3 ADMs are to be specific in their detail as to why a
charge is being made.
2. AIRLINE POLICY
2.1 Airlines are required to publish and communicate in
writing their ADM policies to Agents in advance of
implementation.
2.2 Where possible the model shown in the Attachment
to this Resolution should be applied.
4. ISSUANCE PRINCIPLES
4.1 Airlines should consider establishing policies for a
minimum value for the issuance of a single ADM. Where
such minimum is established it may be published to
Agents.
77
78
RESOLUTION 850m
Attachment A
MODEL ADM INDUSTRY PROCEDURES
1. DESCRIPTION
1.1 ADMs are a legitimate accounting tool for use by all
BSP Airlines and should only be used to collect amounts
or make adjustments to agent transactions in respect of
the issuance and use of Traffic Documents issued by or
at the request of the Agent.
1.2 Alternative uses of ADMs may exist provided that
consultation has taken place either individually with the
Agent or through the applicable local joint consultative
forum.
1.3 ADMs are to be specific in their detail as to why a
charge is being made.
1.4 Any ADM relates to a specific transaction only, and
may not be used to group unrelated transactions
together, however, more than one charge can be included
on one ADM if the reason for the charge is the same, and
a detailed supporting list is provided with the ADM.
1.5 In the event an airline decides to apply a charge for
under-collection or incorrect ticketing on a sale or for the
adjustment of a refund issued incorrectly or incorrectly
calculated, such charges must be clearly explained in the
carriers published ADM policy or must be agreed with
Agents bilaterally in writing.
1.6 No more than one ADM should be raised in relation
to the same original ticket issuance. When more than one
ADM is raised in relation to the same ticket it shall be
specified for a different adjustment to previous issues.
1.7 All rejected or disputed ADMs must be handled by
BSP Airlines in a timely manner.
1.8 Except where otherwise agreed in a market ADMs
should not be used to collect third party costs not directly
associated with the initial ticket issuance of a passenger
journey.
1.9 When ADMs are raised for administration fees the
level of such fees should be commensurate with the cost
of the work incurred.
1.10 When the Agent has used an automated pricing
system to generate the total ticket price including fare,
tax, fees and charges specific to the purchase, and
subsequent issuance, of a ticket for a journey, and there
has been absolutely no manipulation by the Agent, on
such price the ticketing systems shall send a Fare
Calculation Mode Indicator (FCMI) to the airline, in
accordance with the provisions of IATA PSC Resolutions 722f and 722g, to identify automated pricing has
been used. The airline shall ensure the FCMI indicator is
passed to an Agent in the event an ADM is issued.
Resolution 850p
instruments from the Provider after consultation and
recommendations developed, with local Airlines;
RESOLUTION 850p
FINANCIAL SECURITIES
PAC1(47)850p(except USA)
PAC2(47)850p
PAC3(47)850p
Expiry: Indefinite
Type: B
1. DEFINITIONS
1.1 The definitions of terms and expressions used in this
Resolution are contained in Resolution 866.
1.2 FINANCIAL SECURITY PROVIDER (hereafter
referred to as Provider) means any entity that guarantees payment to Members or Airlines, through provision of
an insurance bond or other instrument (excluding bank
guarantees), in the event of the default of an Agent.
2. EVALUATION OF PROVIDERS
AND THEIR PRODUCTS
2.1 IATA shall establish criteria for the consistent evaluation and approval of Providers and Provider products,
and shall make such criteria available to all interested
parties. Criteria shall be subject to review and amendment by IATA annually, or more frequently as may be
necessary due to changes in the financial security and/or
insurance markets;
2.1.1 No Provider or Provider product shall be accepted
for the purposes of an Agent meeting the financial criteria
by the provision of additional financial security where
permitted by the applicable Sales Agency Rules unless
such Provider or Provider product has been approved by
IATA in accordance with this Resolution.
2.2 IATA shall conduct, at a minimum, an annual review
of all Providers and Provider products previously
approved by IATA. After such review(s), IATA shall
determine whether such Provider or Provider product
meets criteria in effect at that time;
2.3 The result of the initial and periodic evaluation shall
be reported to the LCAGP and APJC/Executive Council
as appropriate. Their views shall be relayed to IATA,
who shall decide whether to accept financial security
79
RESOLUTION 860a
PAC1(47)852(except USA)
PAC2(47)852
PAC3(47)852
PAC1(46)860a(except USA)
PAC2(46)860a
PAC3(46)860a
Expiry: Indefinite
Type: B
1. METHOD OF DESIGNATING A
TICKETING AIRLINE
Expiry: Indefinite
Type: B
2. COMPOSITION
80
Resolution 860a
2.6 IATA shall provide adequate Secretariat support for
meetings of the Council. Reports and recommendations
of the Council shall be placed on the agenda of the
Passenger Agency Conference.
3. RESPONSIBILITIES
3.1 The Council shall be responsible for making recommendations to Conference on the development,
management and marketing of the Passenger Agency
Programme which shall include the consideration and
development of an Ombudsman. The Council may make
recommendations to Conference for improvements to all
aspects of the Agency Programme.
3.2 The Council shall review the Conference agenda
immediately after publication and in any event no later
than 30 days from publication.
3.2.1 The Council shall be authorised to review all
agenda items, and recommend changes to proposed
resolution amendments having a direct impact on the
Agent/Airline relationship. The procedure for taking forward Council recommendations shall be as per the
following provisions:
3.2.1(a) any recommendations shall be included with the
next Conference agenda submittal by the Secretary;
3.2.1(b) the Conference will review both the original
proposal and the amended proposal submitted by the
Council. If Conference takes action to adopt the original
proposal the matter will be referred back to the Council,
and the resolution amendments shall be held suspended
pending review by the Council;
3.2.1(c) provided there are issues to be addressed, the
Council shall convene to review the decisions of PAConf
immediately following such Conference, and in any event
no later than 30 days following that Conference;
3.2.1(d) following the review any changes to the proposal, including any recommendation for deferral of
implementation, shall be presented to the Conference for
consideration by mail vote, or as a recommendation for
an agenda submission to the next PAConf;
be addressed as a separate meeting. The Agency Administrator and the Chief Executive of ECTAA shall be ex
officio members.
3.4 The Council may recommend to Conference changes
to agency fees.
3.5 The Travel Agency Commissioner Programme (hereinafter TAC Programme) is under the purview of the
Council.
3.6 The Council shall receive and approve the budget of
the TAC Programme in compliance with the following
principles:
the costs of the TAC Programme shall be borne in
equal proportions by Members and Accredited
Agents
funding for the Programme shall be furnished through
IATA, which shall provide 50% from monies contributed by all IATA Members, and 50% from monies
contributed by all IATA Accredited Agents
each IATA Accredited Agent may be called upon to
contribute up to USD5.00 per year or acceptable
equivalent per location
3.7 The Council shall control the budget and associated
expenditures. It will in particular monitor that expenditures
are in line with the terms and objectives of the TAC office.
3.7.1 Part of the expenditures should be associated to
the establishment and update of a public database of
TAC decisions.
3.8 The Council shall receive regular reports provided by
IATA on TAC's activities in a format and at a frequency
determined by the Council.
4. IMPLEMENTATION
Upon implementation of this resolution, the following
resolution shall become simultaneously rescinded.
PAC1(38)860 (except USA)
PAC2(38)860
PAC3(38)860
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RESOLUTION 866
PAC1(46)862(except USA)
PAC2(46)862
PAC3(46)862
Expiry: Indefinite
Type: B
PAC1(47)866(except USA)
PAC2(47)866
PAC3(47)866
Expiry: Indefinite
Type: B
82
Resolution 866
Accredited Agents. This includes accreditation, BSP matters, and training.
AGENCY PROGRAMME JOINT COUNCIL (sometimes
known as APJC) means a Council consisting of an equal
number of representatives of air carriers and Agents
established to assist the Conference in the performance
of its functions by making recommendations on any
aspect of the Agency Programme in the country or area
concerned.
AGENCY SALES DATA (means that data which is
collated from ticket issuance by Agents and submitted by
the Ticketing System Providers to the BSP on a daily
basis.
AGENCY SALES TRANSMITTAL (sometimes referred to
as Sales Transmittal) means the Agent's list for a
Reporting Period in non-BSP Countries, of all Traffic
Documents and Standard Administrative Forms used, and
accompanied by the required administrative forms and
supporting documentation.
AGENCY SERVICES MANAGER means the IATA official
designated by the Agency Administrator to manage the
accreditation programme locally in the country (area).
When so decided by the Agency Administrator, this
person may also act as the local representative of ISS
Management.
AGENT See Accredited Agent
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84
provided to an ET Agent by a Member or Airline participating in a BSP, which authorises one or more Locations
of the Agent to issue Electronic Tickets. A copy or parallel
advice must be sent to the BSP Manager.
ELECTRONIC
TICKETING
SYSTEM
(sometimes
referred to as SYSTEM) means an automated method,
including programmes and procedures, which has access
to airline PNR data, stored in a CRS or airline reservation
system for the issuance of Electronic Tickets.
ESTABLISHED BSP PERFORMANCE means a minimum of three years as an Accredited Passenger Sales
Agent (Agent), without any consistency of irregularity
reports being issued, or default action taken, against such
Agent or any of its Approved Locations (Locations) in the
last three years.
EUROPE ACCREDITED AGENT (EAA) means a legal
entity established in one country within the EU/EEA and
Switzerland, with financial responsibility for Locations in
other countries in the EU/EEA and Switzerland.
EXECUTIVE COUNCIL see Joint Executive Council.
FACE-TO-FACE TRANSACTION means an Agent making a sale by a Card against a Member's or Airline's
merchant agreement when the Card and the Cardholder
are simultaneously present at the time of the transaction
(see also Non-Face-to-Face Transaction).
FORM OF CONCURRENCE means that form to be
completed by non-IATA air carriers wishing to participate
in IATA Billing and Settlement Plans as provided for by
Resolution 850 Attachment E.
GENERAL CONCURRENCE (appointment by) means
the process whereby a Member automatically appoints
Accredited Agents, without further procedural formality, as
described in Resolution 878. The names of the Members
using the General Concurrence method of appointment,
and any prior conditions they may have set, are published
in the Travel Agent's Handbook.
GENERAL SALES AGENT (sometimes referred to as
GSA) means, for the purposes of the Sales Agency
Rules, any Person to whom a Member or a non-IATA
carrier has delegated general authority to represent it for
purposes of sales of passenger and/or cargo air transportation in a defined territory. This may include a non-Airline
GSA appointed under the provisions of Resolution 876.
GLOBAL DISTRIBUTION SYSTEM (sometimes referred
to as GDS) means a computerised system containing
information about schedules, availability, fares and
related services, and through which reservations can be
made, or tickets issued, and which makes some, or all, of
these facilit ies available to subscribers.
HEAD OFFICE LOCATION means an Accredited Agent's
principal place of business which is an Approved
Location.
HINGE ACCOUNT means the bank account into which
agents' remittances are paid and from which monies are
distributed to participating Airlines.
IATA means the International Air Transport Association.
Resolution 866
IATA AGENCY DISTRIBUTION SYSTEM see Agency
Programme.
AGENCY
PROGRAMME
see
85
SYSTEM PROVIDER means the person, company corporation or other legal entity which supplies the system,
approved by the Participating Airlines as may be applicable, and which is party to this Agreement.
86
TOUR OPERATOR means a person/entity which organises, advertises and/or promotes tours and makes them
available for the sale to the general public by combining
air transportation with surface arrangements; provided
that in the following countries a Member shall not function
as a tour operator: Brazil, Germany, Greece, Israel, Italy,
Tunisia and Turkey.
TRAFFIC DOCUMENTS means the following forms
issued manually, mechanically or electronically for air
passenger transportation over the lines of the Member or
Airline and for related services, whether or not they bear
a pre-printed individual Member's identification:
(a) Carriers' own Traffic Documents Passenger Ticket
and Baggage Check forms, Automated Ticket/
Boarding Passes, Miscellaneous Charges Orders,
Multiple Purpose Documents, Agents Refund
Resolution 878
Vouchers and OnLine Tickets supplied by Members
to Accredited Agents for issue to their customers,
and
(b) Standard Traffic Documents as defined.
RESOLUTION 878
GENERAL CONCURRENCE
PAC1(47)878(except USA)
PAC2(47)878
PAC3(47)878
Expiry: Indefinite
Type: B
1. STATEMENT OF GENERAL
CONCURRENCE
1.1 A Member has the option to appoint Agents by
signing a statement of General Concurrence, as shown in
Attachment A.
1.2 A statement of General Concurrence by a Member
shall normally be required for each IATA Area.
1.3 A Member is not obliged to include all of the countries
in each such Area, but will identify such exceptions when
they apply.
1.4 A Member, by the signing of a statement of General
Concurrence, is not obliged to provide an Agent, either
directly or via ISS Management, with any type of Traffic
Documents, or the authority to issue Traffic Documents
on its behalf,
1.5 A statement of General Concurrence, deposited with
IATA, provides the authority to promote and sell that
Member's flights and services. The decision on whether
or not to place Traffic Documents with the Agent rest with
the Member and is subject to the rules and procedures in
the applicable Passenger Sales Agency Rules.
2. PROCEDURES
2.1 A statement of General Concurrence, as shown in
Attachment A, shall be completed and signed in duplicate by the Member, and deposited with IATA.
2.2 The Member shall retain a copy for its own records.
2.3 A list of Members appointing Agents by General
Concurrence shall be published in the relevant Travel
Agent's Handbooks.
87
88
Resolution 880
Location of the Agent or at the Agent's listed Administrative Office within the same country; and
RESOLUTION 880
REDUCED FARES FOR ACCREDITED
PASSENGER SALES AGENTS
PAC1(47)880(except USA)
PAC2(47)880
PAC3(47)880
Expiry: Indefinite
Type: B
RESOLVED that, for the purpose of facilitating the conduct of business operations relative to international air
transportation for Accredited Agents situated elsewhere
than in the USA, Members may, at their option and
subject to the conditions contained in this Resolution,
grant to Accredited Agents international air passenger
transportation at a discount.
DEFINITIONS
The definitions of terms and expressions used in this
Resolution are contained in Resolution 866.
1. AGENT ELIGIBILITY
each Approved Location of an Agent may qualify for
reduced fare transportation under this Resolution provided all the following minimum eligibility requirements
are met:
1.1 at the time of application the Agent shall have had at
least one Approved Location on the Agency List continuously for a period of not less than 12 months; and
1.2 at the time of application, through to the time of
proposed travel, the Agent must not be under notice of
default; or
1.3 at the time of application, through to the time of
proposed travel, the Approved Location of the Agent must
not be under suspension.
2. ELIGIBILITY OF PERSON
TRAVELLING
a reduced fare ticket may be issued under the provisions
of this Resolution to the sole proprietor, partner, director
and/or employee of an Agent when they meet all the
following requirements; the person travelling must:
2.1 have been in the service of the said Accredited Agent
continuously and without interruption for not less than
12 months immediately prior to the date of such
Application; provided that a period of not less than three
months' service with the Agent shall suffice where the
person travelling was in the service of another Accredited
Agent not more than 60 calendar days before commencing his present employment and was eligible under this
Resolution; and
2.2 devote in a full-time capacity all or substantially all of
his time directly to the promotion and sale of travel,
including air transportation, on behalf of the Accredited
Agent making such application, either at an Approved
3. SUBORDINATES OF ELIGIBLE
PERSONS
the eligibility of a person shall not in itself render eligible
such person's subordinates who shall be eligible only if
they meet all the applicable requirements of this
Resolution.
89
7. ACCEPTANCE PROCEDURE
the Member to which the Application is made need not
accept it for processing. The Member may accept the
Application if, in the Member's opinion, it covers travel by
90
8. TICKET ALLOTMENT
DEDUCTIONS
8.1 a deduction shall be made by each Member participating in the transportation granted from the Approved
Location's annual allotment with such Member. However,
where a reduced fare ticket is issued, in whole or in part
over a line which is operated in pool the deduction
pertaining to the pool sector shall be made by the pool
partner Member issuing the ticket, whether or not that
Member operates the actual pool service used; furthermore, where in an interchange service the aircraft of one
Member operate a through service from points on its
routes to points on another Member's routes, under
charter to such other Member, the deduction shall be
made only by the Member operating the flight, when the
person travels exclusively on the interchange service;
8.2 irrespective of the actual Approved Location or listed
Administrative Office where the passenger works, upon
agreement between the Member and the Agent the
deduction may be made from the annual allotment of any
Approved Location of the Agent in the same country, as
long as the aggregate number of tickets which the
Member may grant the Agent pursuant to Subparagraph 5.1 of this Resolution is not exceeded;
8.3 an Agent shall not be allowed to reimburse a Member
for a reduced fare ticket(s) issued and used for the
purpose of reinstating any of its annual allotment for other
reduced fare transportation.
9. ISSUANCE, REPORTING
AND REMITTANCE OF REDUCED
FARE TICKETS
the ticket issuing Member may either issue the reduced
fare ticket directly or instruct the Agent to issue it.
Commission or other remuneration shall not be claimed or
retained by the Agent nor paid by a Member in respect of
the reduced fare transportation provided in accordance
with this Resolution. The reporting and remitting procedures applicable under the Passenger Sales Agency
Rules shall apply in respect of reduced fare tickets;
provided that:
9.1 where the Member issues the ticket a billing shall be
promptly sent to the Agent and shall be settled directly by
the Agent with the Member within 15 days of billing; or
9.2 where the Agent is instructed to issue the ticket such
ticket shall be included in the next Agency sales report
under Billing and Settlement Plan reporting procedures
and remittance shall be made accordingly; or
9.3 where the Agent is instructed to issue the Member's
Traffic Document the Agent shall report the issue in the
next Sales report due to the Member and remit the
amount due in accordance with the remitting provisions
set forth in the applicable Passenger Sales Agency Rules.
Resolution 880
9.4 the ticket must be issued in the calendar year of
application; and
9.5 in no case shall the ticket validity be more than three
months from date of issue.
13. RECORDS
each Accredited Agent shall maintain, for not less than
two years from the date of Application and hold immediately accessible, adequate records to substantiate the
Agent's certification that a person named in any
Application qualifies for reduced fare transportation. Such
records shall be open to inspection by a Member to which
an Application is made and shall include the following:
13.1 payroll ledger and cancelled cheques, money orders
or other proof of payment of salary, wages and/or
commissions as well as all deductions for taxes and
social security (or equivalent) in the case of an employee;
13.2 cash disbursement books and cancelled cheques,
money orders or other proof of payment of salary or other
remuneration for services rendered, made in the case of
a sole proprietor, partner and/or director, eligible as
defined herein;
13.3 service agreements, contracts, time sheets or other
documentary proof of the degree of service required from
each sole proprietor, partner, director and/or employee to
whom payment of remuneration is shown under Subparagraphs 14.1 and 14.2 of this Paragraph;
13.4 copies of all Applications accepted by the Member
to which the Application was made.
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INDIA
A sole proprietor, partner or director of an IATA approved agent
or any other official deputed by such an approved agent in India
will be exempt from the eligibility requirements stipulated in
Subparagraph 2.2 in respect of travel from/to India, provided that
Department of Tourism and the Government of India has
released exchange to the agency for promotion of tourism to
India. (13.04.81)
MEXICO
Nothing in Resolution 203 (now 880) will limit in any way the
laws or the regulatory authority of the Secretary of Communications and Transport to issue one or more passes for air
transportation. (5.3.79)
SOUTH AFRICA
Its terms shall not be construed as having any bearing on the
transportation of an IATA Sales Agent (including its directors,
officers and employees or the spouse or dependents of any
thereof) exclusively on or over the domestic air services operated
within the Republic of South Africa or the Territory of South West
Africa, or between the Republic and the said Territory.
92
From
To
Airline
Flight No.
Date
.................................................................................................................................................................................................
.................................................................................................................................................................................................
.................................................................................................................................................................................................
The undersigned being duly authorised to sign on behalf of the Accredited Agent has read and understood the terms and
conditions of Resolution 880 and declares that this Application is made in accordance with those terms and conditions. In
particular, the clauses relating to eligibility of the Agent and eligibility of the person travelling have been noted.
We undertake to pay the amount of fare due to the Airline as a consequence of this Application.
We further undertake to pay the full applicable fare for each sector for which the transporting Airline's concurrence has
been refused and to remit such amount within 15 days of billing by the Airline whose ticket has been issued.
It is understood that we must inform you of any change in eligibility and we will thereupon return any tickets issued in
response to this Application.
We certify that the information submitted in this Application is complete and accurate in all respects. We understand that
any material misrepresentation on this Application will result in action being taken under Resolution 820e as appropriate.
Such action may include forfeiture of reduced fare transportation privileges.
Name:.........................................................................................................................................................................................
Position in agency: .....................................................................................................................................................................
Signature: ...................................................................................................................................................................................
Official Stamp of the Agent ........................................................................................................................................................
If held, Travel Agent ID Card Nbr. ............................................................................................................................................
IATA
Other (specify)
...................................................................................................................................................................................................
93
* This form is to be reproduced exactly as appears in the IATA publication with no omissions deletions or alterations. It is
to be completed either by typewriter or by hand, in ink, using block letters.
94
Resolution 880a
RESOLUTION 880a
IATA TRAVEL AGENT IDENTITY (ID)
CARD
PAC1(42)880a(except USA)
PAC2(42)880a
PAC3(42)880a
Expiry: Indefinite
Type: B
1. PARTICIPATING MEMBERS
1.1 Members who, in one or more countries, recognise
the IATA Travel Agent ID Card as evidence of the status
of an applicant for concessional travel and/or require
applications for reduced fare transportation over their
services in accordance with Resolution 880, to be supported by details of an IATA Travel Agent ID Card shall
so notify the Agency Administrator;
1.2 the Agency Administrator shall maintain, publish and
circulate, from time to time, lists of:
1.2.1 Members, as shown at Attachment A to this
Resolution, who have indicated their recognition of the
Card as a travel agency employee credential, together
with an indication of the extent to which and the circumstances under which, for those Members, an IATA Travel
Agent ID Card is a requisite to support an application for
reduced fare transportation, and
95
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IBERIA 6ade
Iberia 14a
Inter Air 2e
Iran Air 1a
Kenya Airways 1abcde
KLM
Lan Chile/Lan Peru 14a
Lithuanian Airlines 6ae
Lufthansa 14a
Lufthansa 6c
Luxair 6a
MEA 1ace
Montenegro Airlines 6ace
Northwest Airlines 8abcde
Olympic Airways S.A. 1abc
PAL 1abc
Qantas * 1
Royal Jordanian 1a
SIA 6a
SN Brussels Airlines 6a
Surinam Airways Ltd 5,6,8,9 ce
Thai Airways 3,4,6,7,10 acd
Tunis Air 1abce
Sri Lankan1
IB
IB
D6
IR
KQ
KL
LA
TE
LH
LH
LG
ME
YM
NW
OA
PR
QF
RJ
SQ
SN
PY
TG
TU
UL
AREA
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Worldwide
Africa
Asia
Australia
Caribbean
Europe
Middle East
North America
South America
South Pacific
Domestic only
For travel from Thailand
For travel for agents in El Salvador
For travel from Bolivia
RESOLUTION 880a
Attachment B
B
Bahamas
Bahrain
Bangladesh
Barbados
Belarus
Belgium 1
Belize
Benin
Bermuda
Bolivia22
Bosnia Herzegovina
Botswana
Brazil
Bulgaria
Burkina Faso
Burundi
C
Cambodia
Cameroon 1
Canada 1
Cape Verde
Cayman Islands
Chad
Chile
China, PRC
Chinese Taipei
Colombia
Congo
1
97
I
Iceland
India
Iran
Indonesia
1
Ireland 1
Israel
Italy
J
Jamaica
Japan
Jordan 1
K
Kazakhstan
Kenya 1
Kiribati
Korea, Republic of
Kuwait
Kyrgyzstan
L
Latvia
Lebanon 1
Lesotho
Libya
Liechtenstein
Lithuania 1
Luxembourg 1
M
Macau (SAR)
Macedonia (FYROM)
Madagascar
Malawi
Malaysia
Mali
Malta
Marshall Islands
Martinique
Mauritania
Mauritius
Mexico
Micronesia
Moldova
Monaco
Mongolia
Morocco
Mozambique
Myanmar
N
Namibia
Nepal
Netherlands
98
Suriname 1
Swaziland
Sweden
Switzerland
Syria
T
Tanzania
Thailand 1
Togo
Tonga 1
Trinidad & Tobago
Tunisia 1
Turkey
Turks & Caicos Islands
U
Uganda
United Arab Emirates 1
United Kingdom 1
United States of America
Ukraine
Uruguay
V
Venezuela
Vietnam
Virgin Islands, British
W
X
Y
Yemen
Z
Zambia
Zimbabwe
99
100
Resolution 884
RESOLUTION 884
REDUCED FARES FOR DELEGATES
ATTENDING OFFICIAL JOINT
INDUSTRY MEETINGS
PAC1(33)884(except USA)
PAC2(33)884
PAC3(33)884
Expiry: Indefinite
Type: B
RESOLVED that,
1. for the purpose of attending a properly convened joint
IATA/UFTAA meeting, or any other meeting under the
auspices of IATA, the following persons may be provided
by Members with international air passenger transportation to and from the point where such meeting is being
held:
1.1 the Secretary General of UFTAA;
1.2 any professional official employed by a national or
regional Travel Agent Association (e.g. Secretary General
or his titular equivalent);
1.3 any person eligible for travel under Resolution 880
who will be representing UFTAA, or any other Travel
Agent's Association as provided in Subparagraph 1.2
above, in an official capacity at such a meeting.
2. the delegate shall be listed and his function identified
in the official convening notice of the joint meeting issued
by the Agency Administrator in advance of the meeting
and such convening notice shall serve as authority for the
delegate to request a Member to provide reduced fare air
transportation hereunder.
3. the names of such delegates to be included in a
meeting convening notice shall be duly given in writing in
advance by the Secretary General, or titular equivalent,
of the participating organisation, to the Agency Administrator.
4. the international air passenger transportation may be
provided at a discount up to 100% of the applicable air
fare for the class of service provided. Where the charge
for air transportation consists of a fare and a surcharge,
e.g. weekend, business class, the discount shall be
based on the fare and such surcharge, but the discount
shall not be applied to excess baggage charges or to any
surcharge specifically excluded by the Member from the
application of the discount.
5. the outward portion of travel must be commenced not
earlier than five days before the date of commencement
of the meeting as stated in the said convening notice and
travel is to be completed within five days from the close of
the meeting; provided that no break of journey shall be
allowed except at connecting points and such travel shall
be on a direct routing.
101
PAC1(38)886(except USA)
PAC2(38)886
PAC3(38)886
Expiry: Indefinite
Type: B
RESOLVED that,
1 free or reduced fare transportation for groups of not
less than six persons travelling on a trip organised by one
Member or jointly by two or more Members may be
granted by the Member(s), provided each such person
issued with a ticket under the provisions of this Resolution
is a sole proprietor, a partner, director or employee of an
Accredited Agent (but not necessarily of the same Agent),
and subject to the following conditions:
2. DEFINITIONS
5. ELIGIBILITY
6. CHANGES IN ELIGIBILITY
4. ASSEMBLY POINT RULES
4.1 Courses of Instruction
persons in the group may depart individually from their
point(s) of origin but not earlier than 48 hours prior to the
start of the course of instruction and may travel to the
assembly point where the instruction is to be given.
Travel may however begin earlier than 48 hours beforehand in those instances where the organising Member
does not operate a later flight which would ensure arrival
prior to the start of the course of instruction;
102
Resolution 886
members of the group shall nevertheless be permitted to
travel under the terms of this Resolution.
8. APPOINTMENT BY ISSUING
MEMBER
notwithstanding the fact that not all Members participating
in the carriage may have appointed the Agent(s) concerned, free or reduced fare transportation may nevertheless be granted under the terms of this Resolution
provided that the Member issuing or arranging for the
issue of the ticket has duly appointed the Agent in
accordance with the Passenger Sales Agency Rules.
9. PASSENGER EXPENSES
9.1 for travel involving an organised course of instruction
at destination or participation in a destination familiarisation tour, Members are permitted to arrange and to pay
for, if necessary, the hotel expenses, meals, surface
transportation, local taxes, sightseeing and airport service
charges, limited to points along the route over which the
passenger travels on the flight, for a maximum of ten
days except that for journeys wholly within geographical
Europe such absorption of expenses is permitted for a
maximum of eight days;
9.2 where early arrival for a full-time course of instruction
is necessitated by the circumstances described in Subparagraph 4.1 of this Resolution, the organising Member
may additionally pay for expenses incurred between time
of arrival and time of commencement of the course up to
a maximum of 48 hours only.
organised course of instruction or a destination familiarisation tour whether or not such travel is at the discount
provided for in Resolution 880.
12. ESCORTS
a Member may provide one or more of its employees to
act as escort, guide or instructor for groups travelling
under the provisions hereof.
GOVERNMENT RESERVATIONS
CANADA
Nothing in Resolution 203b (now 886) or approval thereof shall
be construed as limiting in any way the statutory power and duty
of The National Transportation Agency of Canada to approve the
issuance of any and all free and reduced fare transportation by
air carriers subject to the Agency's jurisdiction and under such
terms, conditions and forms as the Agency may direct, and that
the issuing of such other free or reduced rate transportation shall
not be deemed by the International Air Transport Association or
any Member thereof to be contrary to any Resolution or Rule of
the Association or to the provisions of any agreement to which
such air carriers are party as Members of the Association.
(10.6.76)
MEXICO
Nothing in Resolution 203b (now 886) will limit in any way the
laws or the regulatory authority of the Secretary of Communications and Transport to issue one or more passes for air
transportation. (5.3.79)
UNITED STATES
Order 71-12-39 dated 16 December 1971: Approval of said
Resolution, insofar as it is applicable in air transportation as
defined by the Federal Aviation Act of 1958, shall not be
construed as:
(a) an exemption from the requirements of filing tariff provisions
as a condition precedent under Section 403 of the Federal
Aviation Act of 1958 to the issuance of passes to any
person described in said Resolution;
(b) a determination as to whether a violation of Section 404 of
the Federal Aviation Act of 1958 would result from the
issuance of passes pursuant to such Resolution whether or
not tariff provisions applicable thereto have previously been
filed with the Board; and
(c) an exemption from the provisions of the Board's Economic
Regulations relating to tariffs for free or reduced rate
transportation.
103
RESOLUTION 886p
PAC1(23)886p(except USA)
PAC2(23)886p
PAC3(23)886p
Expiry: Indefinite
Type: B
RESOLVED that
1. for the purpose of attending a hearing called by the
Travel Agency Commissioner the following persons may
be provided by Members with reduced fare international
air passenger transportation pursuant to this Resolution to
and from the point where such hearing is being held:
1.1 the sole proprietor, partner, director or employee of
an Agent which is party to a Commissioner hearing, who
has been designated by the Agent as its representative at
such hearing,
1.2 the sole proprietor, partner, director or employee of
an applicant which is party to a Commissioner hearing,
who has been designated by the applicant as its representative at such hearing.
2. the representatives shall be listed in a notice issued by
the Agency Administrator in advance of the hearing and
such notice shall serve as authority for the representative
to request a Member to provide reduced fare air transportation pursuant to the provisions of this Resolution.
3. the names of such representatives to be included in
the notice shall be duly given in writing in advance by the
Agent or applicant to the Agency Administrator.
4. the international air passenger transportation may be
provided at a discount not in excess of 75% of the
applicable air fare for the class of service provided;
notwithstanding any conditions governing special fares,
tickets issued for such transportation may not be issued
using special inclusive tour basing fares. Where the
charge for air transportation consists of a fare and a
weekend surcharge, stopover surcharge or peak surcharge, the discount shall be based on the fare and such
surcharge; however, the discount shall not be applied to
any other surcharge or charge such as a sleeper surcharge or excess baggage charge.
5. the dates of outbound and return travel shall be at the
discretion of the representative concerned; provided that
the total duration of the journey shall not exceed that of
the hearing, plus seven days; provided further that no
break of journey shall be allowed except at connecting
points and such travel shall be on a direct routing.
6. in all other respects such transportation shall be
subject to the conditions of Resolution 880 except that in
respect of the persons described in Subparagraph 1.1 no
charge shall be made against the Agent's annual allotment.
104
Resolution 890
RESOLUTION 890
2.1 Authority
PAC1(46)890(except USA)
PAC2(46)890
PAC3(46)890
Expiry: Indefinite
Type: B
RECOGNISING that Members/Airlines wish to grant authority to Agents to transact Card sales against the merchant agreements of Members and Airlines and
RECOGNISING that Members/Airlines and Agents seek
to establish a defined series of procedures in order to
eliminate or substantially reduce their exposure to fraud,
IT IS RESOLVED that the following conditions shall apply,
and the following procedures shall be adhered to, in the
sale of passenger air transportation for which payment is
made by a Card that is accepted by the Agent on behalf
of a Member/Airline in the country concerned.
2.1.1(a) when the Card and the Card Holder are simultaneously present at the time of the transactions (hereinafter referred to as face-to-face transactions), or
2.1.1(b) for signature-on-file transactions, and any other
form of Card sales in which a Card and Card Holder are
not simultaneously present, (hereinafter referred to as
Non Face to Face Transactions), which shall be made
under the sole responsibility and liability of the Agent.
2.1.2 For signature-on-file transactions, where the Card
holder empowers the Agent to issue Traffic Documents
against a Card, whereby the charge form bears the
remark signature on file in the place of the signature, a
clear written arrangement between Card Holder, Card
company and the Agent must exist. Disputes between the
Card Holder and the Agent do not release the Card
Holder from its liability towards the Card company.
2.1.3 Signature on file-type agreements enable Agents to
sign the charge form on behalf of the Card Holder. Such
agreements must contain the following information:
2.1.3(i) definition of agreement's duration,
2.1.3(ii) provision for termination (by both parties),
1. CARD ACCEPTANCE
1.2 The Agent shall ensure that the type of Card being
processed during the sale is accepted for payment by the
Member/Airline whose Traffic Document is being issued.
If necessary, the Agent may wish to seek clarification by
contacting the Member/Airline concerned directly.
1.3 In the event of an Agent accepting a Card which is
not accepted by the Member/Airline whose Traffic Document is being issued, the Member/Airline shall charge the
non-payment from the Card Company to the Agent by
means of an Agency Debit Memo, or, in non-BSP
countries, a subsequent adjustment will be made by the
Member whose Traffic Document was issued.
1.4 No Card issued in the name of the Agent, or in the
name of a person permitted to act on behalf of the Agent,
or in the name of the Agent's officer, partner or employee,
shall be used in connection with the sale of air transportation on behalf of a Member/Airline to any customer of
the Agent.
105
2.2 Liability
2.2.1 Face-to-face transactions
The Agent shall not be held liable for payment to the
airlines for a face-to-face transaction, provided that the
procedures set out in Paragraph 2.4, and any other Rules
and Procedures set out in the BSP Manual for Agents,
have been adhered to by the Agent.
106
2.4 Procedures
Card sales shall be subject to the Rules and Procedures
set forth in the BSP Manual for Agents as well as those
within this Paragraph 2.4, provided, however, that in case
of any conflict or inconsistency between the language of
the BSP Manual for Agents and the language of this
Paragraph, then the language of this Paragraph shall
prevail.
2.5 Reporting
The Agent shall adhere to the local reporting procedures,
as contained in the BSP Manual for Agents, or, for nonBSP transactions, as detailed by the Member/Airline
whose ticket has been issued.
2.6 Records
2.6.1 In order to demonstrate its adherence to the procedures contained in this Resolution in reference to a
rejected transaction, the Agent shall retain all supporting
documentation relating to the Card transaction for a
minimum period of thirteen (13) months.
2.6.2 As the principal to the merchant agreement, the
Member/Airline is the rightful owner of all such supporting
documentation.
2.6.3 In the event of material changes to the status of an
Agent including, without limitation, the ceasing of operation, there is a continuing obligation on the part of the
Agent to ensure that supporting documentation is
retained, and can subsequently be made available to
Members/Airlines as required.
2.6.4 If the ticketing Member/Airline receives a notice of a
dispute relating to a transaction submitted to the Card
Company, the Member/Airline will notify the Agent within
7 days and request appropriate supporting documentation
and information, and the Agent shall promptly comply with
any such request within 7 days.
Resolution 892
3. RESPONSIBILITY FOR SETTLEMENT
OF CARD TRANSACTIONS
3.1 The Agent is not responsible for the remittance from
the Card Company to Members/Airlines of amounts
payable under sales made by Cards approved for such
sales by the Member/Airline whose Traffic Document is
issued, provided the Agent adheres to all applicable
Rules and Procedures for handling Card sales, including,
but not limited to, the correct and punctual reporting
actions specified within the relevant BSP Manual for
Agents;
3.2 Notwithstanding Paragraph 3.1 above, an Agent still
has a duty to provide reasonable assistance to a
Member/Airline that may have difficulty in receiving the
settlement due to it.
3.3 When a sale is made by an Agent operating in a
BSP, the Agent shall submit the Universal Credit Card
Charge Form described in Paragraph 2.3 of this Resolution, in accordance with the local Rules and Procedures
set forth in the BSP Manual for Agents (Chapter 14), so
as to ensure receipt within the deadline established for
that purpose. If, as a result of any failure on the Agent's
part to adhere to all applicable Rules and Procedures, the
relevant Member/Airline is unable to collect the transaction amount due, the Member/Airline shall charge the
loss to the Agent that issued the Traffic Document by
means of an Agency Debit Memo.
RESOLUTION 892
DISCLOSURE OF POSITIONS TAKEN
AT AN IATA MEETING
PAC1(37)892
PAC2(37)892
PAC3(37)892
Expiry: Indefinite
Type: B
GOVERNMENT RESERVATIONS
UNITED STATES
Order 80-5-143 issued 21 May 1980 approved Resolution 816
(now 892) subject to the following conditions:
(a) That each IATA Member may, at its discretion divulge its
own vote or position taken at any IATA meeting; and
(b) That a vote tally be included in minutes of IATA meetings
filed with the Board and made available to the public.
4. REFUNDING
4.1 When effecting refunds against sales made by credit
card the Agent shall in addition to the obligations
described under its Passenger Sales Agency Agreement
observe the following rules and such other rules as are
detailed in the BSP Manual for Agents
4.2 Refund amounts of totally unused and partly used
tickets shall only be refunded to the credit card number
which was originally used for payment.
107
RESOLUTION 898a
ELECTRONIC RESERVATION
SERVICES PROVIDERS
PAC1(41)898a(except USA)
PAC2(41)898a
PAC3(41)898a
Expiry: Indefinite
Type: B
DEFINITIONS
The definitions of terms and expressions used in this
Resolution are contained in Resolution 866.
1. APPLICATION
1.1 Any Person in possession of the appropriate official
licence, where required, wishing to be listed by IATA as
an Electronic Reservation Services Provider, may do so
by applying to the Agency Administrator, providing details
of its name, mailing address and, where applicable, its
Internet address and by paying the appropriate listing fee.
1.2 Nothing in this Resolution shall be deemed to constitute appointment of the Electronic Reservation Services
Provider as an IATA Accredited Agent of the Member, or
travel principal. Nothing in this Resolution shall be
deemed to require or to foreclose an agreement on
remuneration between the Member, and/or travel principal
and the Electronic Reservation Services Provider. Members shall use ERSP data solely for the identification of
the source of sale for inventory control purposes.
3. TRAFFIC DOCUMENTS
An Electronic Reservation Services Provider shall not be
provided with Standard Traffic Documents.
5. TICKETING PROCEDURES
An Electronic Reservation Services Provider shall notify
to its user that the ticketing of the reservation processed
under the terms of this Resolution is conducted by a
Member or an IATA Accredited Agent when this is the
case.
108
109
Country Listing
COUNTRY LISTING
MONGOLIA
110
Country Listing
MOROCCO........................................................................................................................... 268
MOZAMBIQUE ..................................................................................................................... 269
NEPAL.................................................................................................................................. 271
NETHERLANDS................................................................................................................... 276
NEW ZEALAND ................................................................................................................... 277
NIGERIA ............................................................................................................................... 282
PAKISTAN ........................................................................................................................... 284
PAPUA NEW GUINEA ......................................................................................................... 285
PHILIPPINES ....................................................................................................................... 287
POLAND............................................................................................................................... 290
PORTUGAL.......................................................................................................................... 292
ROMANIA & MOLDOVA...................................................................................................... 294
RUSSIAN FEDERATION ..................................................................................................... 298
RWANDA ............................................................................................................................. 301
SAUDI ARABIA.................................................................................................................... 304
SCANDINAVIA ..................................................................................................................... 306
(including Denmark, Greenland, Iceland, Norway and Sweden) .................................... 306
SERBIA & MONTENEGRO ................................................................................................. 310
SINGAPORE ........................................................................................................................ 313
SLOVENIA ........................................................................................................................... 316
SOUTH WEST PACIFIC ISLANDS...................................................................................... 318
SOUTHERN AFRICA ........................................................................................................... 324
SPAIN ................................................................................................................................... 326
SRI LANKA .......................................................................................................................... 333
SWITZERLAND/LIECHTENSTEIN ...................................................................................... 334
SYRIAN ARAB REPUBLIC.................................................................................................. 337
TANZANIA & UGANDA ....................................................................................................... 340
THAILAND ........................................................................................................................... 343
TUNISIA ............................................................................................................................... 345
TURKEY ............................................................................................................................... 347
UKRAINE ............................................................................................................................. 351
UNITED KINGDOM .............................................................................................................. 353
VIETNAM.............................................................................................................................. 357
WESTERN BALKANS ......................................................................................................... 358
YEMEN ................................................................................................................................. 361
ZAMBIA ................................................................................................................................ 363
ZIMBABWE .......................................................................................................................... 366
111
Australia
AUSTRALIA
(Effective 1 July 2010 - Mail Vote A176)
Financial Evaluation
The Applicant shall provide audited financial statements prepared in accordance with
Australian accounting standards. Such statements shall be evaluated pursuant to the financial
standards and financial ratio analysis established from time to time by the Agency Program
Joint Council (APJC) and approved by the Passenger Agency Conference (PAConf) and set
forth in this Attachment. To obtain a satisfactory evaluation, the applicant may be required to
provide additional Paid-up Capital. Alternatively an Agent may provide additional Financial
Security in the form of a Bank Guarantee or an Insurance Bond from an insurance company
acceptable to IATA.
Late or incomplete submission of such financial statements will attract a penalty as endorsed
by the APJC and approved by the PAConf from time to time.
Overview
To meet the IATA Financial Criteria, travel agents must pass all four Tests (1, 2, 3 and 4).
If the agent fails Test 1, but passes other Tests, the shortfall of Capital and Reserves must
be provided in the form of Capital Injection or Financial Security.
If the agent passes Test 1, but fails other Tests, the failure(s) must be remedied by
providing Financial Security for Sales at Risk up to the maximum Financial Security
required amount (refer to Section 4, Financial Security).
1.
1.1
The Share Capital and Reserves shall be determined as follows according to the type of the
applicant's entity:
1.1.1
Issued Capital
Minimum of $25,000 paid-up Issued Capital (forming part of the minimum Issued capital and
reserves) regardless of the existence of other reserves (e.g. Issued Capital of $20,000 and
capital profits reserve of $5,000 would not be acceptable). If less than $25,000, security for
the shortfall will be required.
Realised Capital Profits Reserve
Asset Revaluation Reserve (only if supported by a written valuation from an independent
licensed valuer; i.e. Director's valuation will not be accepted).
112
Australia
1.2
1. Accumulated losses,
2. Intangibles including Goodwill, Future Tax Benefits, etc.
3. Loans to and Investments in Related Parties.
Sole Trader/Partnership
Trust
Corporate Trustee
Either the settled sum of the Trust or Issued Capital of the Corporate Trustee adjusted by
those items detailed in Subparagraph 1.1.1 above.
Note: The total of settled sum or units and Issued Capital of the corporate trustee must be a
minimum of $25,000 forming part of the minimum share capital and reserves regardless of
existence of other reserves. If less than $25,000, security for the shortfall will be required.
Unincorporated Trustee
The settled sum of the Trust adjusted by those items detailed in Subparagraph 2.1.1 below.
Where the required minimum is not met, financial security is to be provided as per table in
2.1.1 below.
1.4
113
Australia
such evidence is not available loans from a Related Party will be considered a liability of the
agency.
Loans to and investments in a Related Party will not be considered as assets of the agency
for the purposes of the financial evaluation.
However if the Agent is able to provide satisfactory documentary evidence that:
the Loan or Investment is readily able to be converted to cash and,
will be repaid should the working capital position of the Agent decline,
such assets may be considered.
1.8
Encumbrances
Should any Balance Sheet assets of an applicant be used as security for loans which do not
appear on the Balance Sheet, (e.g. third party loan to directors) those loans will be deducted
from assets, up to the maximum amount of the liability secured by the applicant's assets.
Details of such encumbrances will require disclosure in the Annual Financial Review.
All charges over an applicant's assets, both fixed and floating, require immediate disclosure to
IATA at the time of their creation. Failure to notify the creation of a charge will be regarded as
a serious departure from these financial requirements. Creation of and retirement of all
charges during the year should also be notified to IATA.
1.9
If the agent or its parent company has traded for less than 2 years in the travel industry,
financial security must be provided for the amount of Sales at Risk up to the maximum
Financial Security required. (Refer to Section 4, Financial Security).
If the agent or its parent company undergoes a significant change in ownership, defined as
50% or more, Financial Security must be provided for the amount of Sales at Risk, unless
the entity is publically listed on the Australian Securities Exchange Limited (ASX), and
following the change in ownership, remains a public company on the ASX or a wholly owned
subsidiary of a public listed company on the ASX.
1.10
Group
If your company is a subsidiary of another company or more than one company, you will need
to submit a copy of the most recent annual accounts of these controlling companies. Such
parent company accounts will be considered in the determination of your financial standing as
an applicant or agent. If the entity holding the accreditation passes all tests independently, but
the holding company or group financial status have an adverse impact on the subsidiary,
Financial Security will be required for the Sales at Risk of the subsidiary up to the maximum
Financial Security required (Refer to Section 4, Financial Security).
1.11
Accounting Standards
IATA will take into account when applying the financial criteria changes to the Australian
Accounting Standards as these have relevant impact from time to time.
114
Australia
2.
FINANCIAL STANDARDS
The financial assessment is based on four Tests provided the applicant maintains the
minimum level of share capital and reserves (refer Test 1).
2.1
All applicants must maintain a minimum level of share capital and reserves (as defined in
Paragraph 1.1 hereof) dependent on the scale of operations of each enterprise as measured
by the annual turnover (both travel and non travel).
2.1.1
A Financial Security or additional Issued Capital for any shortfall will be required.
Minimum share capital may be expected to increase from time to time.
2.2
For IATA purposes a Client Travel Account is a bank account that an agent must maintain
separate to the general account which must include all client BSP funds and the subsequent
disbursement of those funds to airline principals. The applicant must comply with all of the
following:
2.2.1 All BSP monies received from clients, in advance of the issue of airline tickets, must
be banked within 2 business days of receipt into an account in the name of the applicant
suitably titled Client or Trust Travel Account.
2.2.2 Interest bearing or term deposits may be opened with any recognised financial
institution.
2.2.3 Any such account as mentioned in 2.2.1 and 2.2.2 must be used exclusively for
clients funds, meaning any funds received from clients of the agent for travel.
2.2.4 Any BSP monies in such an account must not be subject to any encumbrance,
including any floating charge.
2.2.5
All BSP deposits to the Client Travel Account must remain in the account until:
they are paid to the principals on whose behalf they have been received; or
they are refunded to the client who paid the same.
115
Australia
2.2.6 Commission earned is not to be withdrawn from the Client Travel Account until the
tickets have been issued on behalf of the airlines.
2.2.7 Disbursements from the Client Travel Account on behalf of a customer who has not
lodged funds (e.g. sale on credit) are not permitted. These should be made from the
General or Working account of the applicant.
2.2.8 Use of clients funds to finance loans or advances to Related Parties or other parties,
does not comply with the conditions for maintaining a Client Travel Account.
2.2.9 The Client Travel Account and liability for client funds held should be clearly identified
on the Balance Sheet or Notes to the Accounts.
2.2.10 Annual declaration of compliance in all material respects by the agents auditor must
be provided.
2.3
This test is the ratio of working capital in dollars to average monthly overheads. An applicant
should have sufficient working capital in dollar terms to meet overhead expenditure. This
requirement is necessary to ensure the applicant has adequate working capital
commensurate with the size of their operations and sufficient to meet seasonal fluctuations.
Should the Agent have experienced trading losses in the most recent financial year, provision
for continued losses will be calculated unless the Agent provides satisfactory documentary
statements that action has been taken to bring the agency to a satisfactory trading position.
Assets that are loans to directors or associated parties that are not in a group would be
excluded.
The working capital must be positive, which means that Current Assets must exceed Current
Liabilities at the end of the year.
In the event that Working Capital does not meet one months overheads then the following
table will apply:
2.3.1
2.4
Proportion of Financial
Security required as per table
4.1
40%
60%
100% (full guarantee)
Test 4 Profitability
Your accounts must show that you made a profit before tax at the end of the accounting
period.
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Australia
3.
FINANCIAL DISCRETION
It is recognised that different interpretations of financial accounts are possible and do occur.
Accordingly, IATA shall have absolute discretion as to the most appropriate accounting
classification for all items included in Financial Statements or Annual Financial Reviews.
4.
FINANCIAL SECURITY
IATA will require an amount equivalent to the Sales at Risk (i.e. The number of days Sales
at Risk is to be counted from the beginning of the reporting period to the remittance date in
respect to that reporting period/s plus a margin of five days, the result is to be divided by 360
days, and then applied to the annual cash turnover* to calculate estimated amount at risk and
amount of guarantee required as per Resolution 800f) up to the maximum Financial Security
Required amount. Such Financial Security is to be provided in the form of a Bank Guarantee
or Insurance Bond from an insurance company acceptable to IATA. The amount however,
shall be not less than the amount required by the applicant to meet the minimum level in
Paragraph 2.1 of Section 2 hereof.
4.1
Maximum Financial
Security Required
$400,000
$1,000,000
$2,000,000
$10,000,000
Note: *Annual Cash Turnover for the purpose of calculating the Sales at Risk refers to
Annual Gross BSP Cash Sales less taxes.
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Austria
AUSTRIA
Finances
The applicant has to submit a Balance Sheet and Profit and Loss Account (duly
certified by an outside public accountant) for the most recent financial year indicating
a satisfactory financial standing.
Applicants in business operation for less than one year must provide the Agency
Services Office with:
y
and
y
(For applicants operating already one or more than one year before application, the
previously set criteria are still valid. If certified annual report and accounts are
provided proving adequate equity capital and adequate guarantee of long-term
assets and sufficient liquidity, no bank guarantee is required.)
Accredited Agents are to submit a copy of their Annual Report and Accounts within
six months of the financial year-end.
Satisfactory financial standing means specifically:
The Balance Sheet should show:
(i) adequate equity capital
(ii) adequate guarantee of long-term assets
(iii) sufficient liquidity
(iv) maximum of 10 years for fictitious debt repayment schedule
(The number of years for fictitious debt repayment schedule/Fiktive
Schuldentilgungsdauer as per URG part 1 106/ 1997 may in no case be higher than
10 years and must be considered in connection with owner's equity quota which may
no be less than 8%.)
The Profit and Loss Account should show a profit before extraordinary items.
The historical record of profitability may, however, be taken into account where in
extraordinary circumstances an applicant fails to show a profit for one year.
Where an applicant company is the subsidiary of a larger parent organisation, a copy
of audited accounts for the parent organisation must also be submitted.
If an applicant or Accredited Agent fails to meet these criteria he may be approved or
retained provided that a bank guarantee (or insurance bond), is submitted in
accordance with the following requirements:
Page 118
Austria
the amount is calculated on IATA Member Airlines net ticket sales (i.e.
commission and credit card sales deducted),
Preferably timely unlimited guarantees shall be provided, however Guarantees
with minimum validity of three years, ending with 31 December may be provided
under special circumstances.
Agents will be reviewed in accordance with the BSP Sales statistics.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the
reporting and settlement rules is contained in the BSP Manual for Agents supplied to
each Approved Location. Additional copies if needed can be requested through your
local BSP contact.
IATA offers regular BSP procedural training sessions. Any agent wishing to
undertake such training is encouraged to contact the local BSP office.
Working supply
For travel agents approved in Austria the term working supply shall be interpreted
as the number of documents which can be safely stored in the steel safe as
described in Paragraph 5.1.1.7 of Resolution 818 provided that in accordance with
this Paragraph at any time all unissued Traffic Documents not in use have to be
locked in said steel safe.
Licence
Required (Gewerbeberechtigung).
Reinstallation Fee
From agents that are reinstated following a default procedure or Temporary Closure,
an IDFS Administration fee of EUR 360, will be collected via BSP billing method.
Page 119
Bangladesh
BANGALDESH
(Effective 1 June 2011 Mail Vote OA/E20)
1.
Finances
1.1
The applicant must provide a certified and audited Balance Sheet and Profit
and Loss account not more than six months old at the time of submission.
1.2
1.2(a) have conducted travel agent business for at least six (06) months prior to the
date of application.
1.2(b) meet the criteria as published under Resolution 800f, Section 4.
1.3(c) submit a minimum bank guarantee of BDT 3 million or equal to 35 days
average turnover, whichever is higher.
Page 120
Belgium/Luxembourg
BELGIUM/LUXEMBOURG
LOCAL CRITERIA BELGIUM & LUXEMBOURG
(Effective: 1 October 2011 Mail Vote A204)
Finances
Accredited Agents have to submit annually, within six months of the most recent financial
year, the following documents duly certified by an outside public accountant. Indicating a
satisfactory financial standing in accordance with section 3 (all ratios compliant with the
current financial criteria):
y
If the Agent is a subsidiary of a larger parent organisation, the consolidated accounts should
be provided.
An Agent not meeting the legal prescriptions will have to confirm in writing, within the 3
months of the financial review, the actions taken to meet these legal requirements.
All IATA guarantees and bonds should have an unlimited validity.
Candidates/Accredited Agents submitting Accounts showing insolvency will be disapproved.
1. Private Owners
Private owners must always provide a bank guarantee.
1.1. Remittance on fortnightly basis:
Private owners that remit its BSP billing on a fortnightly basis are requested to provide a
guarantee equal to the net cash sales of 3 BSP bi-monthly (every 2 weeks) billing periods (6
weeks) or 1/8th of the net annual BSP cash sales.
1.2. Remittance on weekly basis:
Private owners that remit its BSP billing on a weekly basis are requested to provide a
guarantee equal to the net cash sales of 3 BSP weekly billing periods (3 weeks) or 1/16th of
the net annual BSP cash sales.
2. New Applicants
In the first year of accreditation the guarantee of candidates is revisable every quarter of the
year and adapted to the actual net cash BSP sales turnover in that quarter.
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Belgium/Luxembourg
The More Frequent Remittance scheme is applied to all new Agents in BSP Belgium &
Luxembourg during their first year of accreditation.
During this first year, the Agent is required to remit its BSP billing on a weekly basis (as per
the official calendar published on the IATA portal)
http://www.iata.org/customer-portal/Pages/LocalResourceCenter.aspx.
2.1. New company less than 3 years old (accounts not available).
During the first year, the new Agent is required to remit its BSP billing on a weekly basis ( as
per the official calendar published on the IATA portal)
New Agents with a company constituted within the last 3 years will be requested to provide a
guarantee equal to the estimated net cash sales of 4 BSP weekly billing periods (4 weeks) or
1/12th of the net annual estimated BSP cash sales turnover. The minimum value of the
guarantee is EUR 20.000.
After the first year of accreditation, the new Agent will be entitled to request either of the
following:
-
Maintain the weekly remittance and a guarantee equal to the net cash sales of 4 BSP
weekly billing periods (4 weeks) or 1/12th of the annual BSP cash sales turnover with
a minimum value of EUR 20.000
Remit its BSP billing on a fortnightly basis with an adjusted bank guarantee equal to
the net cash sales of 4 BSP bi-monthly (every 2 weeks) billing periods (8 weeks) or
1/6th of the annual net BSP sales turnover. The minimum value of the guarantee is
EUR 40.000
Maintain the weekly remittance and a guarantee equal to the net cash sales of 3 BSP
weekly billing periods (3 weeks) or 1/16th of the net annual estimated BSP cash sales
turnover with a minimum value of EUR 20.000
Remit its BSP billing on a fortnightly basis with an adjusted bank guarantee equal to
the net cash sales of 3 BSP bi-monthly (every 2 weeks) billing periods ( 6 weeks ) or
1/8th of the net annual BSP cash sales turnover. The minimum value of the guarantee
is EUR 40.000
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Belgium/Luxembourg
= Equity/Total Accounts
Equity
= paid-up capital
+ reserves
- revalued premiums
= equity
+ long-term liabilities
- fixed assets
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Belgium/Luxembourg
5. The Agent must be insured against insolvency in conformity with Art. 36.
if the Agent exists less than 3 years (no accounts available for 3 consecutive
accounting years ), the bank guarantee must be equal to 1/12th of twelve months net
cash BSP sales.
if the Agent exists more than 3 years (accounts available for 3 consecutive accounting
years ), the bank guarantee must be equal to 1/16th of twelve months net cash BSP
sales.
**
if the Agent exists less than 3 years (no accounts available for 3 consecutive
accounting years ), the bank guarantee must be equal to 1/6th of twelve months net
cash BSP sales.
**
if the Agent exists more than 3 years (accounts available for 3 consecutive accounting
years), the bank guarantee must be equal to 1/8th of twelve months net cash BSP
sales.
As a general rule, the VMFR scheme will apply to all BSP Airlines.
Licence
Belgium:
124
Bulgaria
BULGARIA
(Effective 1 January 2010 PAC/32)
GENERAL
An Agent cannot be appointed by an air carrier as a General Sales Agent for the country
concerned or for any part thereof.
An Agent name must not be the same as or misleadingly similar to that of an IATA Member
Airline, or IATA itself.
An Agent or any of its managers, principal shareholders (or person for whom they act as
nominees), directors or officers shall have no record of wilful violations or fiduciary obligations
incurred in the course of business not be undercharged bankrupts.
Any person who holds a financial interest or a position of management shall not have been a
director, or held a position of trust in an IATA Accredited Agent that has been removed from
the IATA Agency List owing money due to default unless it is established that such persons
did not participate in the acts or omissions that caused such removal or default
FINANCES
1.
Financial Evaluation
1.1
Documents Required
New applicants are accepted being an agent with one year of operation on the market,
working with at least three airlines direct or via another IATA Accredited Location and
having access to CRS.
The following documents are required:
-
Balance sheet, Clash Flow and Profit & Loss account duly certified by an
outside certified accountant.
Tax declaration for the most current financial year.
Banking reference.
Statements of sales, verified by airlines or IATA agencies and references from
3 airlines.
Established Agents are required to submit on request Tax Declaration, Balance Sheet,
Cash Flow and Profit & Loss accounts for the past financial year and for the last
reporting month, prepared according to the National Tax and Accounting standards.
The above listed documents must be submitted in electronic copy and in hard copy
upon request. Such action can be requested only by IATA office and conclusions of
such review will be treated in a strictly confidential way.
1.2
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Bulgaria
b)
Insurance/Guarantee
Minimum amount of insurance bond or bank guarantee is EUR 25,000.00, after 6 months of
operation as an IATA agent a cover of 35 days turnover through BSP is required in the form
of insurance bond or bank guarantee. Insurance bond or guarantee levels are reviewed on
annual basis. IATA has to recalculate the average 35-day turnover / for the last 12 months /
on a monthly basis and in case the new level of turnover exceeds the existing insurance with
30% or with 30,000 EUR, to advise the agent in writing for immediate increase.
For Established Agents opening new branch locations for the first year of operation an
immediate increase of EUR 10,000.00 for existing insurance/guarantee is required, after this
period the general rule is applied.
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Bulgaria
License
Any new applicant should present a valid license and a court and tax registration, according
to the current Bulgarian legislation.
The agency manager should inform Agency Service Office / ASO about any further change of
the court registration, or license deprivation, or change of staff. In case of change of staff
Agent should submit to ASO the names of the new qualified staff according to the criteria
above within 3 months.
Automation
Any new applicant must have access to CRS. Not later than one month after approval of the
application, the agent must have facilities for electronic ticketing.
Staff Criteria
The applicant must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and report
these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
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Cambodia
CAMBODIA
(Note: Criteria under review)
3.4.1 Finances
3.4.1.1 the applicant must provide certified or properly audited Balance Sheet and Profit and
Loss account statement not older than six months at time of submission, showing satisfactory
financial standing and ability to remain solvent and pay bills;
3.4.1.1(a) applicants must have as a minimum registered capital of USD40,000.00,
3.4.1.1(b) submit a satisfactory banker's report, and
3.4.1.1(c) submit a financial guarantee equivalent to an average of one month's turnover
3.4.1.2 when assessing whether the applicant meets the financial standing described in
Subparagraph 3.1.1.1 of this Paragraph the following shall be taken into account:
3.4.1.2(a)(i) availability of adequate liquid funds to meet normal trading commitments;
3.4.1.2(a)(ii) capital required to be commensurate with fixed assets;
3.4.1.2(a)(iii) the existence of preferential claims on the assets and the existence of
contingent liabilities;
3.4.1.2(b) the applicant may be required to provide further information or additional financial
support in the form of recapitalisation, bank of insurance bonds or guarantees. Failure on the
part of an Agent to renew, by the expiry date, any such bank or insurance bonds or
guarantees shall constitute grounds for the Agency Administrator to give the Agent notice of
termination of the Sales Agency Agreement, provided that if the Agent demonstrates to the
Agency Administrator prior to the termination date that it meets the financial standards, the
termination shall not take effect;
3.4.1.3 the Agency Administrator shall conduct periodic examinations of the financial standing
of Agents. He may request, and the Agents concerned shall be under obligation to furnish by
the date specified in the Agency Administrator's letter of request, the documents deemed
necessary by the Agency Administrator to conduct such examination.
3.4.1.3(a) failure by an Agent to submit such documents as prescribed shall be grounds for
the Agency Administrator to apply two instances of irregularity and to give the Agent 30 days
to comply. Failure by the Agent to comply within 30 days shall be grounds for the Agency
Administrator to give the Agent notice of termination of the Sales Agency Agreement,
provided that if the Agent submits the financial statements to the Agency Administrator prior
to the termination date, the termination shall not take effect;
3.4.1.3(a)(i) when the Agency Administrator determines that an Agent may no longer satisfy
the criteria as set out in this Paragraph, he may, if the circumstances so warrant, prescribe in
writing such conditions as he deems appropriate to be complied with by the Agent within 60
days of the date of such written prescription. The Agency Administrator shall determine if
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Cambodia
such conditions have been met. On finding that the Agent failed to comply he shall give the
Agent notice of termination of the Sales Agency Agreement;
3.4.1.3(a)(ii) if subsequent to the action taken under Subparagraph 3.4.1.3(a)(i) above, but
prior to the termination date, the Agent satisfies the Agency Administrator that the prescribed
conditions have been met, the termination shall not take effect and the Agency Administrator
shall reinstate credit facilities and notify the Agent, Members, Airlines and ISS Management
accordingly;
3.4.1.3(b) when the financial position of an Agent is subject to examination by the Agency
Administrator, and the Agent is unable to meet the requirements of this Paragraph, the
Agency Administrator shall take normal business fluctuations into account and provide the
Agent with a reasonable period of time to meet these requirements.
3.4.2 Intentionally left blank
3.4.3 Premises
the location for which application is made must:
3.4.3.1 be identified as a travel agent;
3.4.3.2 be freely accessible to the general public for the sale of international air transportation
during normal business hours;
3.4.3.3 be clearly separated from any other business with which it shares common premises;
none of those businesses may be that of an airline, an Accredited Agent
(or such Agent's Approved Location), another travel agency or a General Sales Agent;
3.4.3.4 if located on the premises of an organisation, plant or commercial firm and dedicated
substantially to the travel requirements of that organisation, plant or commercial firm, be a
Branch of an existing Accredited Agent and meet all the qualifications of this Section, except
that it need not be freely accessible to the general public.
3.4.4 Intentionally left blank
3.4.5 Name, Acronym, Logo and Trademark
3.4.5.1(a) the applicant shall not have a name, acronym, logo or trademark which is:
3.4.5.1(a)(i) the same as that of the International Air Transport Association (IATA) or of a
Member or other Airline, or
3.4.5.1(a)(ii) the same as an acronym formed from the two or three letter code of a Member
or other Airline; or
3.4.5.1(a)(iii) misleadingly similar to the name, acronym, logo or trademark of the
International Air Transport Association (IATA), or of a Member or other Airline; provided that
this shall not preclude accreditation of such applicant by the Agency Administrator if no
protest is received from IATA or any Member or other Airline
3.4.5.2 the place of business shall not be identified as an office of an air carrier or group of air
carriers.
EFFECTIVE 1 OCTOBER 2011
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Canada/Bermuda
CANADA/BERMUDA
All Accredited Agents must file annually with the Agency Administrator within 90 days of the
agents fiscal year end, financial statements prepared in accordance with generally accepted
accounting principles. Agents who fail to meet the standards will be requested to rectify their
financial position.
The following pages contain details of the minimum financial standards. We recommend that
the information be studied carefully and discussed with your accountant prior to the
preparation of financial statements.
The financial statements received from applicants and agents are evaluated in accordance
with the following methodology:
1.
PREPARATION
Financial statements, including income statement, must be prepared in accordance
with generally accepted accounting principles and reviewed by a chartered
accountant, certified general accountant, certified management accountant or an
accredited public accountant, who is engaged in independent public practice. Any
interest by the accountant in the ownership of the agency must be divulged. If not
audited, the statements must be accompanied by the accountants Review
Engagement Report. (Reference CICA Handbook, Section 8200). A Notice to Reader
or a Compilation Report are not acceptable.
Audit reports or Review Engagement Reports submitted with financial statements
must reflect the accountants name and address.
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Canada/Bermuda
All agents must notify IATA of any change or alteration to their fiscal year end and of
any legal or governmental procedure that may affect their fiscal year end. This notice
must be in writing and be accompanied by a legal or government issued document
which confirms the change or alteration to an Agents fiscal year end.
All agents must file an original copy of their financial statements with IATA.
2.
2.1
New Applicant
A new applicant who is just commencing operations must submit statements which
reflect current financial position of the agency after at least one month of operation.
2.1.1
New applicants must provide financial statements and a bank guarantee of average
three weeks net cash sales based on assumed turnover, with a minimum of $35,000.
The financial guarantee will be held for a minimum period of 2 years. The Letter of
Credit will be reviewed every six months for two years and will be returned upon
receipt of satisfactory year-end financial statements following the two-year period.
3.
CHANGE OF OWNERSHIP
If the change of ownership of an accredited agency constitutes a 30% or more transfer
of shares or assets, to an outside party and/or constitutes a change of status of the
legal entity previously accredited with IATA, the new owner(s) will be required to
provide a temporary financial security in the form of an Irrevocable Letter of Credit for
a minimum period of 2 years. The minimum amount of the temporary security will be
CAD $35,000 and will be reviewed every six months for two years.
4.
STANDARDS
4.1
Minimum criteria
4.1.1
4.1.1(a) Working capital requirement of $25,000: Working capital is the difference between
Current Assets and Current Liabilities
4.1.1(b) Tangible Net Worth requirement of $35,000: For each branch office already
approved and for each branch office seeking approval the financial statements of the
head office and all locations shall be submitted and the minimum tangible net worth
shall be increased by $5,000 per branch location. This increase in tangible net worth
does not apply to Satellite Ticket Printer locations. (See definition of Tangible Net
Worth).
4.1.1(c) Ratio Tests: An acceptable financial ratio analysis measured by the application of five
ratio tests against which points are allocated. To be considered acceptable, a
minimum of 50% of 15 out of a total of 30 points shall be scored. (Please refer to the
Ratio Tests section for details of the tests applied).
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Canada/Bermuda
4.1.1(d) The minimum working capital and tangible net worth for accredited agents will be as
follows:
a)
b)
c)
4.1.1(e)
Short Accounting Period: Where the financial statements reflect a short accounting
period i.e. less than 12 months, the Profitability Ratio may not be appropriate. As a
result, the total point score would be reduced to 26 and the acceptable minimum to
13.
4.1.1(f)
4.1.1(g) An agent who fails to meet the minimum standards and who injects funds to cover
the deficiency must leave such funds in the agency in order to continue to meet the
standards. If it is subsequently revealed that funds injected have not remained in
the agency, or there has been a violation of the shareholders agreement, a
temporary security (i.e. an irrevocable letter of credit) will be immediately required.
4.1.1(h) If an agent submits a financial statement that reveals a zero cash and/or bank
indebtedness, combined with an Efficiency Ratio for the collection of receivables
greater than 10 days, an irrevocable letter of credit will be requested until a
satisfactory annual financial statement is submitted.
4.1.1(i)
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Canada/Bermuda
4.2
4.2.1
4.2.2
4.2.3
4.2.4
Capital Stock
If shares are issued for other than cash, full details of the consideration must be given.
4.2.5
Cash
Includes cash and bank balances plus cash equivalents such as certificates of
deposit, government bonds, etc. excluding Cash and Term Deposits pledged for
security.
4.2.6
Commingling Assets
Assets not related to the operation of the agency (i.e. owners or partners property,
land, automobile, securities, etc.) will not be considered in the evaluation and will be
deducted in the computation of the Working Capital and Tangible Net Worth.
4.2.7
Current Assets
This amount excludes notes or receivables from related parties, including
shareholders, employees, officers, associates as well as Cash and Term Deposits
pledged for security.
4.2.8
Current Liabilities
This amount must include the current portion of long-term debt.
4.2.9
Gross Sales
In the event this figure is not specifically identified in the financial statements, please
provide the gross sales figures for the period including ticket sales, package tours,
hotels, car rental, insurance, miscellaneous income, etc., NET OF TAX.
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Canada/Bermuda
4.2.10 Investments
If there are any investments in associated companies or other companies, the names
of such companies must be given together with the nature of their business and the
basis used in accounting for this investment, i.e. cost or equity method. Investments in
related companies may be excluded in the computation of working capital and tangible
net worth.
4.2.11 Leasehold Improvements and Organisation Cost
If the amount reflected on the Balance Sheet is material, the Agent/applicant may be
requested to supply a reconciliation of such costs or contracts/receipts to substantiate
costs.
4.2.12 Loans from Shareholders
In order to be included in the Tangible Net Worth calculation, these loans must be long
term. Supply an undertaking that these loans will not be repaid if by so doing the
Working Capital and/or Tangible Net Worth will be reduced below the levels
acceptable to IATA and also that on winding up the company, such loans will not be
paid until all Member airlines' claims are satisfied in full. Attachment to this document
is the standard shareholders' agreement which must be completed and signed by the
shareholders of the company.
4.2.13 Net Profit After Tax
Profit after taxes but before extraordinary items.
4.2.14 Net Tangible Assets
Total assets, less intangible assets such as goodwill, franchise fees, covenants not to
compete, client lists, etc.
4.2.15 Payment of Dividends or Capital Drawings
Supply an undertaking to restrict any dividend payments, other surplus distribution or
withdrawal of capital which would result in the impairment of Working Capital and/or
Tangible Net Worth to the point where it is below the minimum acceptable to IATA.
The shareholders agreement to this document is to be used for this purpose.
4.2.16 Tangible Net Worth
This is calculated by summing common and/or preferred stock, paid-in/contributed
capital, subordinated shareholders' loan plus retained earnings (minus deficit), less
intangible assets such as goodwill, franchise fees, mailing/client lists and covenants
not to compete; receivables from related parties, including shareholders, officers and
employees are excluded when calculating the tangible net worth.
4.2.17 Total Debt
Includes current liabilities and all loans from third parties. It does not include
noncurrent loans provided by shareholders or proprietors. Loans from associate
parties are included, unless subordinated to other parties.
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Canada/Bermuda
4.3
Ratio Tests
The following ratio tests are performed on all financial statements by the computer
assisted financial evaluation system "CAFES" and points attributed accordingly, as
indicated. The maximum number of points obtainable is 30 made up as follows:
Current Ratio
Quick Ratio
Efficiency Ratio
Debt Ratio
Return on Net Worth
Profitability ratio
8 points
4 points
5 points
9 points
4 points
Current Assets
Current Liabilities
8 points
7 points
6 points
5 points
4 points
3 points
2 points
1 point
0 points
2. QUICK RATIO:
This ratio measures the ability of the entity to pay short-term debts "instantly".
Over 1.59
1.40 - 1.59
1.20 - 1.39
1.00 - 1.19
under 1.00
4 points
3 points
2 points
1 point
0 points
5 points
4 points
3 points
2 points
1 point
0 points
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Canada/Bermuda
4. DEBT RATIO:
Total Debt_____
Net Tangible Assets
This ratio measures the amount of assets provided by creditors for each dollar of
Tangible Assets.
Under 0.4
0.4 - 0.49
0.5 - 0.59
0.6 - 0.69
0.7 - 0.79
0.8 - 0.89
0.9 - 0.99
1.0 - 1.19
1.2 - 1.29
Over 1.29
9 points
8 points
7 points
6 points
5 points
4 points
3 points
2 points
1 point
0 points
4 points
3 points
2 points
1 point
0 points
Where the financial statements reflect a short accounting period, e.g. in the case of
new applicants whose operations are commencing or new entities formed as a result
of a change of ownership, this ratio may not applied and as a result the total point
score would be reduced to 26 (30 - 4 = 26). The acceptable minimum number of
points would consequently be reduced to 13.
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Canada/Bermuda
SHAREHOLDERS AGREEMENT
Attachment to Standards and Methodology
for the Evaluation of Financial Statements (Canada & Bermuda)
EXECUTED IN DUPLICATE
THIS AGREEMENT made the
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Name of Company)
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
By a Passenger Sales Agency Agreement (hereinafter called the Agency Agreement) made between
the Company and IATA, the Company agrees to sell air passenger transportation on behalf of the
Members of IATA and the members agree to pay commission thereon when the Company has received
approval to so represent IATA and its Member Airlines.
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Canada/Bermuda
B.
All the issued and outstanding shares of the Company are held by:
(Names of Shareholders)
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises and of the
covenants and conditions hereinafter contained, the parties hereto agree amongst themselves as follows:
1.
The Shareholders represent and warrant to IATA that they are the registered and/or beneficial owners of
all the issued and outstanding shares in the Company, and that they have a good and marketable title to
such shares free and clear of liens, claims, encumbrances and restrictions of any kind.
2.
The Shareholders represent, warrant, covenant and agree that they will not permit or cause the Company
to, and the Company agrees that it will not:
(a)
(b)
(c)
(d)
(e)
declare or pay any dividends on the issued and outstanding shares in the Company;
make any repayments in any form, (including wages and salaries) to any shareholder, on
account of any loan from, interest in or indebtedness of the Company, whether secured or
otherwise;
purchase or redeem any share in the Company;
distribute capital or make any payment to any shareholder based on the shares owned or held
by such shareholder;
issue, grant, or sell any additional shares, warrants, bonds or debentures of the Company.
If the effect of the foregoing transactions would jeopardize or reduce the financial position of the
Company below standards for approval or retention as an Approved Passenger Sales Agent established
from time to time by IATA and which are set forth in the IATA Travel Agents Handbook.
3.
If any of the goods and chattels of the Company shall be at any time seized or taken in execution or
attachment or if the Company shall make an assignment for the benefit of creditors or shall become
bankrupt or insolvent, or become subject to any legislative enactments relating to liquidation or windingup, whether voluntary or compulsory, then and in any such event, the shareholders covenant and agree
that they will not request or accept any payment from the Company, its liquidator, trustee, receiver or
manager on account of any indebtedness to the Shareholder unless and until all amounts owing to the
Member Airlines are paid in full.
139
Canada/Bermuda
In WITNESS WHEREOF the parties hereto have executed this Agreement as of the date and year above written.
Shareholders (Signatures):
Witness (Signatures):
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
Company:
The Corporate Seal (if required)
By: ____________________________________
(Title)
_______________________________________
(Witness)
140
2.
FINANCE
2.1
New agency applying for IATA accreditation: conditions to be fulfilled during the
two first years of activity
If the agency is new or has been operating for less than 12 months, it must provide the
following:
141
(i)
The number of "sales days at risk" is counted from the 1st day of sales to the
date of settlement, plus 5 days.
The "risk amount" is the result obtained above, divided by 360 days, then
multiplied by the annual estimated volume of BSP cash sales constituting the
"risk amount".
(ii)
2.2
When applying the above formula, the IATA office will undertake a review of
the guarantee any time after the first 3 months of BSP activity, on the basis of
the real BSP cash sales volume for the past months. The amount of the
guarantee required shall then be raised if it appears to be insufficient to cover
the "risk amount".
Agencies that have been in BSP operation for at least two financial years
The agency has 3 options:
Option 1:
to provide financial statements for evaluation. The agent that selects this option must
provide each year and within 6 months after the end of the financial year, a balance
sheet, profit and loss account and annexes, duly certified by an accredited
independent accountant. The IATA office will proceed with the financial evaluation of
the agency on the basis of the criteria indicated in Paragraph 2.2.1 below, with the aim
of determining the financial health of the agency and the amount of the guarantee to
be provided.
142
Option 2:
not to provide financial statements, but to agree to produce a direct bank guarantee,
the amount of which is to be calculated according to the stipulations of Paragraph
2.1.1 above. The number of years the agency has been in existence shall be used to
calculate the discount (see Paragraph 2.2.2).
Option 3:
to participate in the joint guarantee fund GAV-AOC of FISAVET (see Paragraph
2.2.3).
Selection of Option by the Travel Agencies that just have 2 years of BSP
Operation
At the request of the IATA office, the agents that just have 2 years of BSP operation
must advise their choice of option. This choice will apply to them for 2 years. They will
be free to change thereafter.
2.2.1
(b) The equity capital must be in excess of the company's debts and other long-term
liabilities. In this context, "long-term" refers to a repayment period of more than 12
months after the end of the current financial year.
(c) Nett operating assets
(i)
The net operating assets must be in excess of the short-term debts. The
following elements of the operating assets must be excluded from the
calculations:
143
Costs payable
Doubtful debts
Blocked funds (short term placements such as DAT not included)
The amount of the "long-term obligations" not covered by equity capital must
be added to the short-term debts.
(ii)
Operating assets less short-term debts (nett operating assets) must amount to
more than the "risk amount" (annual average of nett cash sales, multiplied by
the number of selling days at risk).
If the nett operating assets should amount to less than the "risk amount", the
shortfall between these two amounts must be covered by a guarantee that is to
be provided within 60 days after the agency has been notified of this.
Remark: Whatever the financial position of the agency resulting from the
abovementioned financial evaluation may be, a minimum guarantee will be
required in accordance with the stipulations of Paragraph 2.2.2 b).
2.2.2
The agency opting for this alternative shall provide a bank guarantee for an
amount to be calculated in accordance to the procedures for risk amount
calculation given in Paragraph 2.1.1. The risk amount thus obtained shall be
weighted with the aid of the elements contained in the table below:
Criteria
1. Regularity of payments
made on time over the past
2 years (24 months).
2. Qualification / worldwide
experience of the agency
manager.
Elements for
Evaluation
0 delay
1 delay
Discount
Rate
- 25%
+ 25%
+ 75%
Professional
- 20%
2-5 years
5-<10 years
>10 to 15 yrs
+ 15 years
- 5%
- 10%
- 15%
- 20%
0%
Remarks
The IATA office will follow
up on payment dates and
register all incidents
A positive mark will be
awarded to a professional
person (in the aerial
transport sector) who is
personally active in the
administration of the travel
agency.
Age: number of years of
practice as an accredited
IATA Agent.
The greater this number, the
more this will attest to the
professionalism of the
agency.
144
4. Type of company
Sole proprietor
- 0%
Branch of multi
national
company
- 20%
Other types
- 0%
Remark: The discounts are cumulative. The value of the discount is deducted from the initially
calculated guarantee amount.
(b)
145
2.2.3.2 The member agencies of the joint guarantee fund shall be obliged to provide their
audited financial statements (balance sheet, profit and loss account and annexes,
duly certified by an independent accredited accountant) within 6 months after the end
of each financial year, in order for an annual financial review to be carried out
according to the criteria prescribed in Paragraph 2.2.1 above.
The IATA office shall proceed with the financial evaluation of these agencies and shall
communicate the results/recommendation to the Manager of the Fund for any action
he may see appropriate.
2.2.3.3 Obligation of the Fund to provide a bank guarantee
In order to ensure IATA that the Fund has sufficient amount to cover the global risk of
its members, the Fund is committed to provide IATA with a bank guarantee issued by
its bank, in the wording required by IATA and for an amount that must always be
greater than the amount required as the minimum for the funds to be feasible and
viable. This such level of minimum amount was set by the APJC/08 of October 2004
at FCFA 500 millions.
Any time that the Nett Equity of the Fund is less than the above set minimum, IATA
will require the Fund to adjust its members fee or raise exceptional resources from
them in order to meet the minimum level. This gap must be filled within a maximum of
3 months from the notification received from IATA.
2.2.3.4 Adjustment of the amount of the bank guarantee
In order to ensure IATA that the bank guarantee has a sufficient level of coverage of
the global risk exposure, the Fund Monitoring Committee shall review the Default
amount of the funds members and assess the non-recovery rate defined as the
Amount of Defaults non recovered over total Volume of BSP Cash sales of the
members of the Fund.
The amount of defaults not recovered is defined as the total amount declared not paid
by the agent the day of the default minus all payments received by IATA or by the
mutual fund in the period of 90 days following the default date.
The bank guarantee amount will be deemed satisfactory when it is equal to or above
the non-recovery rate plus a surplus of 30%.
IATA will require the fund to adjust the amount of the bank guarantee any time that its
amount is less than the above set figure.
2.3
2.4
146
147
1.
GENERAL QUALIFICATIONS
1.1
Finances
1.1.1 the applicant shall submit independently produced financial statements prepared in
accordance with local accounting practices as specified by APJC and published in the
Handbook. Such statements shall be evaluated and found satisfactory pursuant to the
methodology and standards established from time to time by APJC and published in the
Handbook. Notwithstanding the requirement set out below in Paragraph 1.1.2, to obtain a
satisfactory evaluation, the applicant may be required to provide additional financial support in
the form of a bank or insurance guarantee or as otherwise determined by APJC.
1.1.2 the applicants must submit a financial guarantee equivalent to 50% of the average
monthly sales turnover of the total passenger sales on behalf of BSP-CN participating airlines
but not less than CNY 1.5 million, whichever is higher.
1.1.3 the Agency Services Manager shall conduct periodic examinations of the financial
standing of Agents. He may request and the Agent concerned shall be under obligation to
furnish, by the date specified in the Agency Services Manager's letter of request, the
documents deemed necessary by the Agency Services Manager to conduct such
examination. Failure by the Agent to submit such documents as prescribed shall be grounds
for the Agency Services Manager to apply two instances of irregularity and to give the Agent
30 days to comply. Failure by the Agent to comply within 30 days shall be grounds for the
Agency Administrator to give the Agent notice of termination of the Sales Agency Agreement,
provided that if the Agent demonstrates to the Agency Administrator prior to the termination
date that it meets the financial criteria incorporated in the Travel Agent's Handbook the
termination shall not take effect.
1.1.4 when the financial position of an Agent is subject to examination by the Agency
Administrator, and the Agent is unable to meet the financial criteria of the Travel Agent's
Handbook, the Agency Administrator shall take normal business fluctuations into account and
provide the Agent with a reasonable period of time to meet those criteria.
1.2
Personnel
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
1.3
1.3.1 the applicant shall conform to the provisions laid down in Sections 2 and 5 of
Resolution 818g.
148
Name
1.4.1
the applicant must not have a name, acronym, logo or trademark which is:
1.4.2 the same as that of the International Air Transport Association (IATA) or of a Member
or other Airline, or
1.4.3 the same as an acronym formed from the two or three letter designator of a Member
or other Airline.
1.4.4 misleadingly similar to the name, acronym, logo or trademark of the International Air
Transport Association (IATA) or that of a Member or other Airline; provided that this shall not
preclude the accreditation of such applicant by the Agency Administrator if no protest is
received from any Member.
1.4.5 the place of business must not be identified as an office of a Member or of a group of
Members or of an air carrier or group of air carriers.
1.5
Wilful Misconduct
The applicant, its principal stockholders (or persons for whom they act as nominees),
directors, officers or managers shall not have unsatisfactory records with regard to adherence
to ethical business practices, nor be undischarged bankrupts.
1.6
Prior Default
The applicant must not be a General Sales Agent for any air carrier in the People's Republic
of China (whether or not for the whole of that country); provided that this shall not preclude
consideration by the Agency Services Manager of such an applicant if the application
contains evidence, to his satisfaction, that the applicant will have ceased to be such a
General Sales Agent before the date of effectiveness of the Agency Services Manager's
decision.
1.8
Electronic Ticketing
The applicant shall have, at the place of business under application, the facility to issue on
behalf of Members/ Airlines participating in the BSP, STDs through the use of an approved
Electronic Ticketing System which meets the requirements set out in Resolution 854.
149
Branch Office
The applicant must wholly own and fully manage the business for which approval is sought as
a Branch Office Location.
1.10
License
Where officially required the applicant must be in possession of a valid license to trade.
1.11
Accuracy of Statements
All material statements made in the application shall be accurate and complete.
1.12
An applicant which demonstrates that its business is solely concerned with the organizing of
Inclusive Tours and which fulfils all other criteria but does not maintain a place of business
which is freely accessible to the general public, may nevertheless be accredited provided that
it performs the issuance of Traffic Documents related to such Inclusive Tours only.
150
Chinese Taipei
CHINESE TAIPEI
(Effective 1 June 2011 (PAConf/33)
(Note: criteria under review)
3.4.1 Finances
3.4.1.1 the applicant must provide accredited accounts showing satisfactory financial standing
and ability to remain solvent and pay bills:
3.4.1.2 applicants must:
3.4.1.2(a) have as a minimum paid up capital of TWD 6,000,000, and
3.4.1.2(b) submit a satisfactory banker's report, and
3.4.1.2(c) submit a financial guarantee of a minimum of TWD 500,000 or the equivalent of one
hundred percent of one month's turnover whichever is higher;
3.4.1.3(a) when assessing whether the applicant meets the financial standing described in
Subparagraph 3.4.1.1 of this Paragraph the following shall be taken into account:
3.4.1.3(a)(i) availability of adequate liquid funds to meet normal trading commitments;
3.4.1.3(a)(ii) capital required to be commensurate with fixed assets;
3.4.1.3(a)(iii) the existence of preferential claims on the assets and the existence of contingent
liabilities;
3.4.1.3(b) the applicant may be required to provide further information and will be required to
provide additional financial support in the form of recapitalisation, bank or insurance bonds or
guarantees.
Failure on the part of an Agent to renew, by the expiry date, any such bank or insurance
bonds or guarantees shall constitute grounds for the Agency Administrator to give the Agent
notice of termination of the Sales Agency Agreement, provided that if the Agent demonstrates
to the Agency Administrator prior to the termination date that it meets the financial standards,
the termination shall not take effect;
3.4.1.4 the Agency Administrator shall conduct periodic examinations of the financial standing
of Agents. He may request, and the Agents concerned shall be under obligation to furnish by
the date specified in the Agency Administrator's letter of request, the documents deemed
necessary by the Agency Administrator to conduct such examinations.
3.4.1.4(a) failure by an Agent to submit such documents as prescribed shall be grounds for
the Agency Administrator to apply two instances of irregularity and to give the Agent 30 days
to comply. Failure by the Agent to comply within 30 days shall be grounds for the Agency
Administrator to give the Agent notice of termination of the Sales Agency Agreement,
provided that if the Agent submits the financial statements to the Agency Administrator prior
to the termination date, the termination shall not take effect:
151
Chinese Taipei
3.4.1.4(a)(i) when the Agency Administrator determines that an Agent may no longer satisfy
the criteria as set out in this Paragraph, he may, if circumstances so warrant, prescribe in
writing such conditions as he deems appropriate to be complied with by the Agent within 60
days of the date of such written prescription. The Agency Administrator shall determine if
such conditions have been met. On finding that the Agent failed to comply he shall give the
Agent notice of termination of the Sales Agency Agreement,
3.4.1.4.1(a)(ii) if subsequent to the action taken under Subparagraph 3.4.1.4(a)(i) above, but
prior to the termination date, the Agent satisfies the Agency Administrator that the prescribed
conditions have been met, the termination shall not take effect and the Agency Administrator
shall reinstate credit facilities and notify the Agent, Members, Airlines and ISS Management
accordingly;
3.4.1.4(b) when the financial position of an Agent is subject to examination by the Agency
Administrator, and the Agent is unable to meet the requirements of this
Paragraph, the Agency Administrator shall take normal business fluctuations into account and
provide the Agent with a reasonable period of time to meet these requirements.
3.4.2 Personnel
Intentionally left blank
3.4.3 Premises
the location for which application is made must:
3.4.3.1 be identified as a travel agent;
3.4.3.2 be freely accessible to the general public for the sale of international air transportation
during normal business hours;
3.4.3 be clearly separated from any other business with which it shares common premises;
none of those businesses may be that of an airline, an Accredited Agent (or such an Agent's
Approved Location), another travel agency or a General Sales Agent;
3.4.3.4 if located on the premises of an organisation, plant or commercial firm and dedicated
substantially to the travel requirements of that organisation, plant or commercial firm, be a
Branch of an existing Accredited Agent and meet all the qualifications of this Section, except
that it need not be freely accessible to the general public.
3.4.4 Intentionally left blank
3.4.5 Name, Acronym, Logo and Trademark
3.4.5.1(a) the applicant shall not have a name, acronym, logo and trademark which is:
3.4.5.1(a)(i) the same as that of the International Air Transport Association (IATA) or of a
Member or other Airline, or
3.4.5.1(a)(ii) the same as an acronym formed from the two or three letter code of a Member or
other Airline; or
3.4.5.1(a)(iii) misleadingly similar to the name, acronym, logo or trademark of the International
Air Transport Association (IATA) or of a Member or other Airline; provided that this shall not
152
Chinese Taipei
preclude accreditation of such applicant by the Agency Administrator if no protest is received
from IATA or any Member or other Airline.
3.4.5.2 the place of business shall not be identified as an office of an air carrier or group of air
carriers.
3.4.6 Wilful Misconduct
the applicant and/or those who direct its operations, has not been found by a court of
competent jurisdiction to have wilfully violated any fiduciary obligations to the general public
or to the airlines unless it can be shown that the Agent can be relied upon to adhere to the
terms of the Sales Agency Agreement.
3.4.7 Prior Default
the applicant or any Person holding a financial or ownership interest in the applicant, or the
manager who exercises daily supervision over the operation of the applicant, shall not have
been involved in the ownership or financial management of an Agent which is under notice of
default or has been removed from the Agency List on grounds of default; provided that the
applicant may nevertheless be approved if the Agency Administrator is satisfied that such
person did not participate in the acts or omissions that caused such removal or default, or if
he is satisfied that the applicant can be relied upon to comply with the terms of the Sales
Agency Agreement.
3.4.8 General Sales Agents
the applicant must not be a General Sales Agent in Chinese Taipei for any air carrier.
3.4.9 Branch Office
a location may be included on the Agency List as a Branch Office provided that the corporate
structure or ownership of the Head Office and the Branch is absolute and all inclusive as a
single entity, and the Head Office has full legal and financial responsibility for the
administration, staff liability, maintenance and operational expense of the Branch Office.
3.4.10 Licence
the applicant must be in possession of a valid licence from the Tourism Bureau of the Ministry
of Transport.
3.4.11 Accuracy of Statements
all material statements made in the application shall be accurate and complete.
3.4.12 Access to Electronic Ticketing
the applicant shall have at the place of business under application, the facility to issue on
behalf of Members and other Airlines participating in the BSP, STDs through the use of an
approved Electronic ticketing system as defined in Resolution 854.
153
Croatia
CROATIA
I.
GENERAL CRITERIA
Automation
The Agency must have access to a GDS and facilities for electronic ticketing.
Security
Minimum security standards set in Resolution 818g, Attachment A, Section 5 apply.
II.
FINANCIAL CRITERIA
If the Agent fully complies with all other criteria, a short term liquidity coefficient between 0,75
and 1 is acceptable.
154
Croatia
DOCUMENTATION
An Agent who applies for IATA accreditation should provide the following
documentation:
1. Excerpt from the registry of the Commercial Court
2. Opening balance sheet for the agents who have just started their business
3. Current balance sheet not older than 6 months, original or copy with signature and
stamp of a Certified Public Accountant other than agent (stamp of the Financial
Agency FINA is acceptable)
4. BON-2
An Agent should bare the cost of the provision of all financial documents
An existing IATA accredited agent who is subject of the annual financial assessment:
1. Current balance sheet not older than 6 months, original or copy with signature and
stamp of a Certified Public Accountant other than agent (stamp of the Financial
Agency FINA is acceptable)
2. BON 2
An Agent should bare the cost of the provision of all financial documents
FINANCIAL SECURITY
Bank Guarantees
Agents will be required to provide a bank guarantee (BG) according to the rules below:
1.
Agents with average turnover between 0 EUR and 40.000 EUR in period of 35 days
will be required to provide a bank guarantee of 25.000 EUR. New applicants will be
required to provide bank guarantee of 25.000 EUR.
Minimal amount of the bank guarantee is 25.000 EUR.
2.
Agents with average turnover between 40.001 EUR and 100.000 EUR in period of 35
days will be required to provide a bank guarantee that covers 50% of their 35 day
turnover but with the minimum amount of 25.000 EUR.
3.
Agents with average turnover between 100.001 EUR and 200.000 EUR in period of 35
days will be required to provide a bank guarantee that covers 40% of their 35 day
turnover but with the minimum amount of 50.000 EUR.
4.
Agents with average turnover over 200.001 EUR in period of 35 days will be required
to provide a bank guarantee that covers 30% of their 35 day turnover but with the
minimum amount of 80.000 EUR.
One (1) month prior to the expiration date of the valid BG, ASO Manager has to inform
the Agent about the new BG amount.
New BG amount will be based on the average turnover in the last 4 quarters (12
consecutive months ending with the last billing period for which the info are available).
155
Croatia
E.g.: Valid BG expiration date 30.06.2009: Agency should be informed on 30.05.2009
about the new BG amount; Calculation will be done for period 16.05.2008
15.05.2009.
Due to the fact that the only BSP currency is the local one (HRK) and that BG
amounts are expressed in EUR currency, the exchange rate applied would be HNB
(Croatian National Bank) official middle rate valid on the date when the info regarding
the BG amount should be sent to the agent.
The BG amount would be rounded on 1.000 EUR above the amount resulted from the
calculation.
E.g. 40% of 35-day turnover is 63.365,42 EUR. The requested amount for the BG
would be 64.000,00 EUR.
Procedure in case of Agents increased turnover
In case when an Agents turnover increases or decreases significantly (when an Agent moves
more then one group as described above), level of bank guarantee would be reviewed and
changed.
Control of Agents bank guarantee vs. actual turnover would be reviewed quarterly. New bank
guarantee will be requested only in case when existing bank guarantee amount should
increase for more than 10.000,00 EUR.
Agents failure to follow the procedure above would lead to the blocking of the Ticketing
Authority.
Definition of the high risk agent
156
Croatia
Depending on the specific case the BG must be increased according to the table below:
Reason:
BG increase:
50%
25%
to the BG on amount in
accordance with the newly
assigned group (or additional BG)
In case of Agents default, bank guarantee will be increased as described above. Bank
guarantee will be calculated to cover 35 days average turnover in last four quarters.
If an Agent, after bank guarantee has been increased according to the rule above, shows full
compliancy to the Remittance/Settlement rules for one year, he/she is entitled to decrease
bank guarantee according to the rules described in the section Bank guarantees.
III.
STAFF CRITERIA
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
157
Cyprus
CYPRUS
(Effective 1 December 2010 PAC/33)
New Applicants
An Agent must be in operation for 12 months before applying for IATA accreditation.
Finances
Applicants must submit the following documents for the most recent financial year:
(a) full set of audited financial statements including Balance Sheet and Profit & Loss Account
(duly certified by an outside public accountant)
(b) aged statements of Accounts Receivable and Accounts Payable as at the Balance Sheet
date (duly certified by an outside public accountant)
(c) copy of Bank's statements and reconciliation statements for the last three months of the
financial year for which financial statements were submitted
Accredited Agents are to submit these documents within six months of the financial
year-end.
The financial statements should show:
y
y
minimum issued and fully paid share capital/capital account of EUR 17,000.
liquidity ratio (Current Assets/Current Liabilities) of at least 1.0. When calculating the
liquidity ratio, debtors over one year old will be deducted and Related Companies,
Directors', Shareholders' or Partners' Accounts are also to be excluded. In the event that
the liquidity ratio is less than 1.0 but more than 0.9, then the level and quality of an
Agent's fixed assets may be taken into consideration.
a balance sheet that is not insolvent. When deducting Total Liabilities (Current Liabilities +
Long-term Liabilities) from Total Assets (Fixed Assets + Current Assets) the value must be
positive.
158
Cyprus
159
Czech/Slovak Republics
I.
FINANCES
A.
NEW APPLICANTS
1.
The applicant (legal entity or physical person) must perform as a Travel Agency on the
market in the territory of IATA CZ/SK for one year at least.
The Applicant has to present Balance Sheet and Profit and Loss Account covering a period of
trading of at least 12 months (prepared according to Czech/Slovak accounting standards or
International Financial Reporting Standards (IFRS) not older than 3 (three) months and
audited by an official certified external Auditor.
2.
Score
Limit
Score Calculation
1,142857 points per
every 0,1%
6,66667 points per every
0,1 in excess of 1,00
4,571429 points per
every 0,1 below 0,90
< 30 points Applicant will be rejected due to poor financial situation of Agency
> 30 points Bank Guarantee equal to 1/12 of expected annual BSP cash sales will be
requested
3.
The minimum Bank Guarantee (B/G) will be CZK 350.000. Any guarantee should be
preferably with unlimited validity or at least minimum one-year validity and may be cancelled
with approval of the beneficiary only.
4.
IATA CZ/SK reviews bank guarantee on a continuous basis and will request an
increase in case if its level is no longer adequate. One month notice is given for the increase.
B.
1.
IATA agents that have been in BSP business for more than 12 months will have the
choice to decide for
(a)
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Czech/Slovak Republics
(b)
bank guarantee equal to 1/16 days of actual annual BSP sales for the last 12 months.
Bank guarantee should be preferably with unlimited validity or at least minimum oneyear validity and may be cancelled with the approval of the beneficiary only. IATA
CZ/SK reviews the level of the guarantee on a continuous basis and will request an
increase of the guarantee if its level is no longer adequate, meaning less than 85% of
the required coverage.
II.
A.
Financial Reviews
1.
All agencies may be reviewed by periodical examination of the financial standing in
accordance with Subparagraph 2.4.1 (a)(i) of Resolution 818g Section 2 in order to
determine their financial stability and expected level of corresponding financial security. In
such case agent has to present Balance sheet and Profit and Loss Account (prepared
according to IATA standards) covering a period of 12 months but not older than 3 (three
months) and duly certified by an authorized external auditor.
2.
If the Travel Agency is a subsidiary of an international parent organization based
outside CZ/SK territory and is applying to IATA CZ/SK to accept the Letter of Guarantee and
Undertaking of the parent organization instead of the B/G or insurance whatever applicable of
the Travel Agency itself, and if IATA CZ/SK is ready to accept such an application, the
documents mentioned in Paragraph A.1 have to be submitted for the parent organization
under the same rules and conditions. In case the IATA CZ/SK office finds these financial
results of the parent organization unsatisfactory, the Travel Agency will be obliged to arrange
for the calculated B/G locally or insurance.
B.
License
All agents have always to possess a license and to be registered according to the laws and
regulations valid in the Czech Republic or in the Slovak Republic. Evidence of the registration
with the Court has to be attached to the application by new applicant.
C.
Security
Automation
The office has to be equipped by a CRS and automated ticketing system certified in BSP
CZ/SK. All IATA locations must have an Internet access (preferably ISDN connection).
161
Egypt
EGYPT
(Effective 12 December 2010 PAConf/33)
1. Accreditation Procedures
IATA accredited travel agents should provide self-assessment report based on most recent
available audited financial statement for the last 12 month of activity, for the most recent yearend within six months following the Financial Year end in conformity to Egyptian Accounting
Standard (EAS) as per requirements and procedures as approved by APJC Egypt.
2. Paid-up Capital
Paid-up capital should be considered adequate in conformity to the category type of an
applicants Government license.
3. Liquidity Ratio
Current Assets /Current Liabilities to be 1.2 : 1
Definition : Measures the extent to which current liabilities are covered by current assets,
Generating current assets and satisfying current liabilities is an ongoing process; so the
current ratio is a measure of `the margin of safety at a point in time.
Current Assets Components:
- Inventory
- Trade receivable, debtors and notes receivable. Due from affiliates.
- Advance payments
- Current Investments
- Cash and cash equivalent
Current Liabilities Components:
-
Provisions
4. Profitability Ratio
Return on Equity (Net income/Stockholders Equity) should be not less than 5% according to
last year audited financial statement covering 12 month period or to demonstrate according to
previous years audited financial statements that the average return on equity for the last 3
years is not less than 5% per annum.
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Egypt
5. Debt Ratio
Total debt/Total equity to be 1.5 : 1
Definition: It compares the resources provided by the creditors (such as loans, commercial
paper, notes, bonds and bank facilities) with the resources provided by the owners. The total
debt to equity ratio determines long term debt payment ability and the conservative approach
is to include all liabilities and near liabilities in the numerator.
Equity Components:
-
Paid up capital
Reserves
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Egypt
2-5 years
10%
6-10 years
20%
11-15 years
30%
16-20 years
40%
Over 20 years
50%
Above reduction scale is granted based on the applicable BG of the prevailing year.
164
Estonia
ESTONIA
(Effective 1 June 2010 PAC/32)
Finances
New applicants and IATA Accredited Agents are required to submit independently audited
Balance Sheet and Profit and Loss accounts indicating a satisfactory financial standing.
Financial statements must show a positive balance of current assets over current liabilities.
Documents must be produced by a nationally approved Public Auditor in accordance with
International Accounting Standards and be translated into English and should not be older
than 6 months. IATA reserves the right to require the annual report including Profit and
Balance sheet in original.
All Agents shall send annually, within six (6) months of the end date of its financial year, their
audited financial documents to IATA.
Companies with less than one year's trading record must submit a copy of a certified opening
balance sheet. Where an applicant company is the subsidiary of a larger parent organisation,
a copy of the audited accounts for the parent organisation must also be submitted.
The minimum criteria for Estonia fall into three areas:
1. Profitability
An Agent is required to show profit before tax at the end of the trading period.
2. Equity Capital
Rate of solidity =
3. Solvency
Rate of liquidity =
Bank Guarantee
If an applicant/Agent fails to meet any of the criteria itemized in 1 through 3 above, he may,
however, be approved or retained, provided that a bank guarantee is submitted in accordance
with the following requirements:
y
The amount of the guarantee shall be 9% / 6% of the budgeted or actual turnover, for all
approved locations of the Agent, from ticket sales for IATA Member Airlines and Airlines
participating in the Billing and Settlement Plan (BSP) for 2/4 payments per month.
The amount should be calculated on net sales, i.e., commission and credit card sales to
be deducted.
165
Estonia
166
Ethiopia
ETHIOPIA
(Effective 1 August 2008)
a)
FINANCIAL CRITERIA
1.
Financial Statements
(a) Recent balance sheet and Profit and Loss Accounts audited by certified external
Public Accountants and Auditors.
(b) The financial reports should show net profit.
(c) The agent must have a minimum liquidity ratio of 1.2:1
(d) A minimum paid up capital of $25,000.
2.
Guarantee
A bank guarantee or acceptable insurance financial bond will be calculated based on
average 4 weeks sales less credit card sales and paid up capital but not less than
$25,000. The amount of paid up capital to be used in calculation of guarantees will be
limited to $35,000. Bank guarantee level will be reviewed yearly.
3.
Reduction of Guarantee
To benefit from reduction of guarantee, the following points must be taken into
consideration:
(i)
(ii)
(iii)
The agent should not have a history of irregular payments and never be in
default due to agents fault
The agent must be an accredited IATA agent for a minimum of three years.
The agent must produce minimum sales of Birr 5 million per year.
Percentage of Waiver
NIL
20%
40%
50%
65%
80%
Notwithstanding the guarantee reductions listed above, the minimum guarantee from
any agent will not be below $50,000.
4.
New Applicants
(a)
(b)
(c)
(d)
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Ethiopia
b)
BSP PROCEDURES
c)
OTHER REQUIREMENTS
All agents accredited or new applicants must be equipped with applicable CRS.
168
Federated States
and must be provided by a corporation which meets with the approval of the IATA Agency
Administrator, OR
the applicant shall provide audited financial statements prepared in accordance with generally
accepted accounting principles. Such statements shall be evaluated pursuant to the financial
standards and financial ratio analysis established from time to time by the Conference and as
set forth herein. To obtain a satisfactory evaluation, the applicant may be required to provide
additional financial support in the form of recapitalization or a financial guarantee of an
approved type.
Late extension requests or incomplete submission of such financial statements may attract a
penalty as determined by the Conference from time to time.
1.
1.1
1.1.1
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Federated States
Realized Capital Profits Reserve
Asset Revaluation Reserve (only if supported by a written valuation from an
independent licensed valuer; i.e. Director's valuation will not be accepted),
Share Premium Reserve
Accumulated Profits
Less: 1.
2.
3.
1.1.2
Accumulated Losses,
Provision for future losses,
Intangibles including Goodwill, Future Tax Benefits, etc.
Sole Trader/Partnership
Proprietorship (including reserves) less intangibles, adjusted by those items detailed in
Subparagraph 1.1.1 above.
Statement(s) of assets and liabilities of the principal(s), verified by their solicitor,
auditor or bank manager from their own personal knowledge of their clients' affairs or
from documentary evidence supplied must be submitted for consideration.
1.1.3
Trust
Corporate Trustee
Either the settled sum of the Trust or the paid-up capital of the Corporate Trustee
adjusted by those items detailed in Subparagraph 1.1.1 above.
Note: The total of settled sum or units and paid-up capital of the corporate trustee
must be a minimum of $10,000 forming part of the minimum share capital and
reserves regardless of existence of other reserves. If less than $10,000 a financial
guarantee for the shortfall will be required.
Unincorporated Trustee
The settled sum of the Trust adjusted by those items detailed in Subparagraph 1.1.1
above. Where the required minimum is not met the statement of personal assets and
liabilities of the Trustee(s) as detailed in Subparagraph 1.1.2 above will be reviewed to
determine the net worth.
1.1.4
1.1.5
1.2
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Federated States
Loans from a Related Party. If the Agent provides satisfactory documentary evidence
that the loan is in the form of a long-term commitment to the agency, such loan may
be deducted from the liabilities of the Agent. If such evidence is not available loans
from a Related Party will be considered a liability of the agency.
Loans to and investments in a Related Party will not be considered as assets of the
agency for the purposes of the financial evaluation.
However, if the Agent is able to provide satisfactory documentary evidence that:
will be repaid should the working capital position of the Agent decline, such
assets may be considered.
1.3
Encumbrances
Should any Balance Sheet assets of an applicant be used as security for loans which
do not appear on the Balance Sheet 1 (e.g. third-party loan to directors) those loans
will be deducted from assets, up to the maximum amount of the liability secured by the
applicant's assets. Details of such encumbrances will require disclosure in the Annual
Financial Review.
All charges over an applicant's assets, both fixed and floating, require immediate
disclosure to the Board at the time of their creation. Failure to notify the creation of a
charge will be regarded as a serious departure from these financial requirements.
Creation of and retirement of all charges during the year should also be notified to the
Board.
2.
FINANCIAL STANDARDS
The financial assessment is based on four Tests and the allocation of applicable
points to each Test. Maximum points are 20 and a total of 10 points or more is
considered satisfactory provided the applicant maintains the minimum level of share
capital and reserves (refer Test 1).
2.1
A minimum of 1 point must be obtained from this test regardless of the overall point
score achieved from other Tests. A Bank Guarantee or capital injection for any
Shortfall will be required. Minimum capital may be expected to increase from time to
time.
171
Federated States
2.2
2.2.1
Two points will be allocated for a properly maintained Client Travel Account. To be
eligible for these points the applicant must comply with all of the following:
2.2.1.1 All money received from clients, in advance of the issue of tickets, must be banked
within two days of receipt into a separate account in the name of the applicant
suitably titled Client or Trust Travel Account.
2.2.1.2 Interest bearing or term deposits may be opened with any recognized financial
institution.
2.2.1.3 Any such account as mentioned in 2.2.1.1 and 2.2.1.2 must be used exclusively for
clients' funds.
2.2.1.4 Any such account must not be subject to a right of set off or any encumbrance,
including any floating charge.
2.2.1.5 All deposits to the Client Travel Account must remain in the account until:
they are paid to the principals on whose behalf they have been received; or
they are refunded to the client who paid.
2.2.1.6 Commission earned is not to be withdrawn until the balance has been paid to
principals on whose behalf it has been received.
2.2.1.7 Disbursements from the Clients Travel Account on behalf of a customer who has not
lodged funds (e.g. sale on credit) is not permitted. These should be made from the
General or Working account of the Agent.
2.2.1.8 Use of clients funds to finance loans or advances to Related Parties or others, does
not comply with the conditions of maintaining a Client Travel Account.
2.2.1.9 The Client Travel Account and liability for client deposits should be clearly identified on
the Balance Sheet or Notes to the Accounts.
2.3
172
Federated States
Months Coverage
Greater than 2 months
1 to 2 months
Less than 1 month
Deficiency in working capital
2.4
Points
8
5
2
-3
Points
8
5
2
-3
2.5
Points Summary
Test 1 Minimum Share Capital & Reserves 2
Test 2 Client Travel Account
2
Test 3 Working Capital to Meet Overheads 8
Test 4 Net Tangible Assets to Turnover
Ratio
8
TOTAL:
20
3.
FINANCIAL DISCRETION
It is recognized that different interpretations of financial accounts are possible and do
occur. Accordingly, the General Assembly shall have absolute discretion as to the
most appropriate accounting classification for all items included in Financial
Statements or Annual Financial Reviews.
173
Federated States
4.
FINANCIAL GUARANTEE
Where a financial guarantee is required to meet the above criteria, the General
Assembly will require an amount equivalent to the percentage share of airline sales to
total turnover (e.g. if the criteria requires pro-vision of a bond or $100,000 and 60% of
the applicant's turnover is for air travel, then the Board will require a bond for
$60,000). Such bond amount however, shall be not less than the amount required by
the applicant to meet the minimum level of Share Capital and Reserves in Paragraph
2.1 of Section 2 hereof.
174
Finland
FINLAND
(Effective 1January 2011 PAC/33)
The business entity and/or the owners and managers of all IATA accredited agencies and
agents applying for IATA accreditation must meet all applicable requirements as prescribed
by the law in Finland.
1. GENERAL RULE
1.1 Guarantee Requirements
Agents are required to provide sufficient financial guarantee as detailed in these criteria.
1.2 Remittance Procedures
All IATA-accredited Agents remit on the 15th day after the reporting period using the Direct
Debit procedure.
1.3 Remittance and Payment Frequency
All Agents must remit BSP sales four times a month.
1.4 All Agents Annual Evaluation of Financial Documents
All Agents shall send annually, according to national legislation (currently within six (6)
months from the end date of the Agents financial year), the Agents audited financial
documents to the following:
a)
b)
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Finland
30 days from the removal of the ticket stock, the ticketing authority will be restored and ticket
stock returned to the Agent and the Airlines have the right to reconsider their reappointment
of the Agent.
2. CRITERIA FOR EVALUATION OF AGENTS AUDITED FINANCIAL STATEMENTS
2.1 Official Evaluations performed by Credit Rating Company
An official impartial body (currently Bisnode Finland Oy) is chosen to perform the financial
evaluations, rate the financial status and to follow and report on financial developments
and/or difficulties of IATA Accredited Agents.
2.2 Transition Period Credit Rating Agency
During the transition period from 1 January 2011 until such time when Agents financial
documents for 2010 and /or financial document for financial year ending in September 2010
or after have not yet been submitted to Bisnode Finland Oy, only the Credit Rating Agency
Suomen Asiakastieto Oy credit rating system is applied for these Agents.
2.3 Latest Financial Documents as Basis for the Evaluation
The basis for the evaluation is the latest Financial Documents (duly audited and certified by
an Authorized Public Accountant according to the law in Finland) and a report by the auditors
for the most recent financial year indicating the Agent's financial standing. The evaluation is
performed according to local laws and practices.
2.4 Official Rating used
Following Bisnode Finland Oy rating is used to define Agents financial status:
AAA
AA
A
B
C
No rating
= Highest creditworthiness
= Good creditworthiness
= Creditworthy
= Credit against security
= Credit rejected
= Credit against security
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Finland
4. GUARANTEE
4.1 Accepted Forms of Guarantee
Only Bank guarantee or an insurance company bond / guarantee are accepted.
The Guarantee must not be for a limited period; it must be open-ended and subject to a
minimum notice period of cancellation of ninety (90) days. Parent company guarantees are
not accepted.
4.2 Amount of Required Guarantee
4.2(a) New Agent
The required amount is calculated of the estimated Agents average annual BSP Cash sales,
as provided by the applicant for the two (2) next years when the Agent would be IATA
Accredited Agent. The Guarantee amount will be adjusted for the number of Days of Sales
at Risk.
4.2(b) Other than New Agents
The amount of the guarantee is eight point five per cent (8,5 %) of the calculated annual
average cash sales.
4.2(c) Minimum Guarantee Requirement
Minimum guarantee amount is Euro ten thousand (10.000).
4.2(d) First review of Guarantee amount
The IATA BSP Management will review the level of the Guarantee after the first three months
based on the Amount at Risk computed with reference to the average net cash sales of the
Agent during that period. If the Guarantee has been estimated too low or high, the new
amount shall be set based on the calculation from the sales reports. The revised guarantee
has to be provided upon request by the IATA BSP Management within 30 days of the request.
177
Finland
178
Finland
179
France
FRANCE
(including Monaco, Isle of Reunion and French Territories in Area 1)
(Effective 1 January 2011 PAC/33)
Definitions
-
Capital Resources: Capital Resources include the share capital increased by the
reserves, the balance brought forward and the result of the fiscal year.
Long Term Capital : This includes Capital Resources increased by available funds on
a long term basis:
o
Loans over more than one year
o
Current accounts of associates having been the object of fund blocking
agreement in favour of IATA, according to the terms of the law 83/1179 of 29
December 1983
Current Liabilities : This includes all other debts not already included in Long Term
Capital
Current Assets : A balance sheet item which equals the sum of cash and cash
equivalents, accounts receivable, inventory, marketable securities, prepaid expenses,
and other assets that could be converted to cash in less than one year
Fixed Values : All non Current Assets, not supposed to be converted to cash in the
current or upcoming fiscal year
Working Capital : the difference between Current Assets and Current Liabilities
Remittance Frequency: The remittance frequency for France can be monthly. , Twice
monthly or Weekly on a voluntary basis (in reference with Resolution 818G
Attachment A par 1.6.2).
Bank Guarantee :The financial security eventually requested from an Agent will
consist in a Bank Guarantee on demand delivered by a bank registered in France and
rated by the Banque de France. The Bank Guarantee will be delivered in Euros.
The Basic Bank Guarantee is calculated taking into account the length of the sales
period (depending on remittance frequency), the number of days between the end of
the sales period and the remittance date, and the time defined per resolution for IATA
to seek for late payment as follows:
180
France
Remittance Frequency
Monthly
Twice monthly
Weekly
Criteria
-
2. Capital Resources / Yearly cash BSP remittance >= 1%: the ratio between the
Capital Resources indicated in the Balance Sheet and the Yearly cash BSP sales
figures effected on behalf of IATA Member Airlines and non-IATA Member airlines
participating in the BSP must be equal at least 1%
4. The Liquidity ratio value which is used to set up the Bank Guarantee amount.
181
France
The Liquidity Ratio affects the level of the Final Bank Guarantee required from the
Agent. The financial review is performed based on LR1 ratio. In the specific cases
when the prepayments and revenues received in advance would downgrade the LR1
ratio of the agent and would consequently weaken the agents position on the financial
security required, the financial review could be performed based on LR2 the ratio.
A planning has been set up for the implementation of the criteria based on the liquidity
ratio, as follows. The dates relate to the reception by IATA (uploading on the IATA
dedicated website) of the financial documents from the agents.
January 01, 2011: Implementation of the LR, level 1,03.
Those agents who are not compliant with the 3 first criteria are subject to basic bank
guarantee provision.
Concerning the agents who are compliant with the 3 first criteria, whose liquidity ratio
is set above 1 and under or equal to 1,03, and who will be subject to a financial
review between January and August 2011, they will be authorized to produce the
required bank guarantee in September 2011.
Liquidity ratio ( LR)
LR <=1,03
LR > 1,03
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France
Financial review
-
Agents requirements: Balance Sheet, Profit and Loss accounts and their attachments
established at the close of the most recent fiscal year. For limited companies, they
must be certified by a certified auditor; for other agencies, by a chartered accountant.
The yearly tax return format (liasse fiscale) will be privileged. The tax returns should
be produced to IATA within the deadline established by the French Tax department to
produce the documents. In view and according to its best knowledge of the closure
date of agents, IATA will take the necessary steps to request and obtain the tax
returns within this deadline and consequently review them as soon as possible after
the agents closure date. A calendar will be published, available to the agents on the
IATA web tool BSPlink, indicating the tax return production date following the closure
date according to the legislation.
In order to complete the financial review, IATA will be entitled to request the Auditors
report of the agent on the period reviewed.
The financial statements provided by the Agent will be controlled against the 3 first
criteria:
o Failure to meet any of the 3 criteria will lead the agent to either provide a Bank
Guarantee equal to 100% of the Basic Bank Guarantee or adjust the Capital
Resources and provide a Bank Guarantee according to the Liquidity Ratio after
this adjustment.
o When the 3 criteria are met, the Agents Liquidity Ratio will be crosschecked
with the LR grid to calculate the Bank Guarantee.
Remittance Frequency and form of payment option: the Agent will then have to
choose its Remittance Frequency and form of payment in order to eventually adjust
the Bank Guarantee level.
Follow-up sub-committee
-
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France
New applicants
-
French licence: any Agent applying for an IATA accreditation must hold a licence
(certificat dimmatriculation) delivered by the French Authorities (Atout France) and
keep it valid during all duration of the PSAA.
Reference to criteria
o
If the applicant does not meet these 3 first criteria, but the balance sheet
indicates positive Capital Resources and Long Term Capital covering at least
75% of Fixed Values, the Agent may nevertheless be approved. The agent
must provide the basic Bank Guarantee covering the sales performed on
behalf of IATA Member Airlines and non-IATA Member airlines participating in
the BSP, according to the remittance frequency and form of payment chosen.
184
Turnover
Calculation of the turnover to be taken into account shall be determined as follows:
Total of:
The total amount for sales made on behalf of BSP airlines is hence not integrated;
while only the commissions on such sales are included.
2.
Overhead Expenses
Overhead expenses to be taken into account shall be calculated exclusive of BSP
invoices.
3.
Capital
Capital resources shall include:
the share capital increased by reserves;
the balance brought forward; and
the result of the fiscal year.
However, and this during an adaptation period of three (3) years, current accounts of
associates having been the object of a fund blocking agreement according to the
terms of Law 83-1179 dated 29th December, 1993, shall be integrated for the
calculation of capital resources.
4.
Financial Costs
The financial costs to be taken into account shall be the short-term financial costs
assessment.
185
5.
Summary
Financial evaluation is based on a series of five tests with points awarded against a
total of 20. A minimum of 10 points is considered satisfactory, provided the amount of
capital resources (exclusive of intangible fixed assets) complies with the minimum
level taken into account for the first test.
1st Test Minimum Capital Resources (4 points):
CA
Total CA<20 MCFP
20 MCFP<CA<40 MCFP
40 MCFP or >
(Above are the French abbreviations)
When a loss equal to half of the share capital appears in the Balance Sheet, the
minutes of the Extraordinary General Assembly showing the decision to continue the
applicant's activities must be produced.
For this test, a minimum of 2 points will need to be achieved, regardless of the total
number of points obtained under the other tests. Failing this, a bank guarantee may
be requested. An increase in the minimum capital resources may also be requested.
2nd Test Specific Bank Account Reserved for Airlines' Monies (4 points):
A specific bank account reserved for airlines' monies to be maintained separately from
the Agent's General business bank account; this account is to show all movement of
funds in relation to transactions pertaining to the applicant's sales activities (payments
from customers, reimbursements, settlement with BSP).
A maximum of 4 points will be awarded to the applicant for adherence to the
operational rules of this account as follows:
1.
all funds received as a deposit from customers before issuance of tickets must,
within two days following the date of collection, be paid into this specific
account to be opened in the applicant's name.
2.
these funds may be remunerated by the banks within the framework of their
investment activities.
3.
this account is to function exclusively with the funds received from customers.
4.
5.
all deposits paid into this account must remain therein pending:
(a) their remittance to the beneficiaries to whom the monies are due; or
(b) their reimbursement to the customers who made the corresponding
remittance.
6.
the amount of commissions received may be withdrawn from the account only
after the remittance has been made to the beneficiaries to whom the monies
are due.
186
8.
the use of deposits received from customers to finance any loan or advance,
whatever the reason or purpose, is contrary to the operational rules governing
this account.
9.
the existence of this specific account and the deposits from customers are to
be clearly identified in the applicant's books of account.
Points
>2 months
1 to 2 months
0 to 1 month
0
negative CA
4
2
1
0
-2
Points
4
2.5
1
187
Points
4
2.5
1
0
an opening Balance Sheet which must comply with the above financial
standards;
an estimate of its Profit and Loss Account;
a bank guarantee for an amount equal to the expected sales over 30 days on
behalf of IATA Member Airlines.
The bank guarantee shall remain valid until establishment of a Balance Sheet
reflecting the applicants situation after the end of the first fiscal year and meeting the
criteria defined above. The amount of guarantee may be required to be adjusted at
any time in relation to the monthly turnover achieved on the airlines mentioned above.
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Germany
GERMANY
(Effective 1 January 2011 PAC/33)
1. APPLYING FOR IATA ACCREDITATION
In addition to a complete application the applicant must provide one of the following sureties:
-
Bank guarantee
References to a bank guarantee in this text mean providing a surety/collateral as described
above. Only guarantees waiving the defences of preliminary injunction, of protest and set-off
will be accepted. The surety will be kept by IATA.
The amount of the surety/collateral is assessed on the basis of the BSP (Billing & Settlement
Plan) cash turnover estimate of the applicant in its first year as an IATA travel agent and
according to the selected payment interval.
Calculation of surety/collateral
Monthly collection:
= turnover-estimate for the first year as an IATA travel agent, divided by 360 days, multiplied
by 50 days, rounded to EUR 1,000 (minimum: EUR 25,000).
Periodical (4 times per month) payment:
= turnover-estimate for the first year as an IATA travel agent, divided by 360 days, multiplied
by 29 days, rounded to EUR 1,000 (minimum: EUR 15,000).
The relevant IATA branch will make the necessary adjustments of the surety provided to the
currently required surety level during the first 12 months, during which the travel agent is
acting as an IATA accredited travel agent, and subsequently at regular intervals.
After the first 12 months and after preparation of the first annual accounts, which reflects the
financial situation of the IATA travel agent in its accredited form, the IATA travel agent may
either submit to a financial audit (assessment sheet model) or continue providing security.
Depending on the payment intervals and on the amount of average BSP cash turnover the
local IATA branch will assess the amount of surety.
2. ANNUAL FINANCIAL REVIEWS
As a matter of routine the local IATA branch will annually require all IATA accredited company
headquarters either to submit the data collection sheet for establishing liquidity or if
necessary to adjust the surety. For that purpose IATA provides a so-called bond/guarantee
overview, which shows the referenced turnover period, the surety/ies provided, the payment
intervals as well as the current guarantee/collateral amounts. Moreover, the data relevant to
addresses and company structure, as reported to IATA, will be updated by means of a current
master file sheet.
189
Germany
Documents to be submitted:
-
signed master file sheet, showing the present address and the shareholder structure and
data collection sheet for establishing liquidity including all necessary annexes, in
particular credit agreements to be considered, or
signed bond/guarantee overview together with the required surety (depending on the
amount of the BSP cash turnover and the payment intervals chosen)
All forms will be issued by the relevant IATA branch. IATA will inform of the latest date for
submitting the above documents reasonably in advance. In the case of late receipt an
administration fee of EUR 100.00 + VAT will be payable immediately. Should a further grace
period have expired, the IATA travel agent will be banned from the ticketing and refund
system until further notice, at the same time a further fee of EUR 300.00 + VAT will be
charged.
3. GUARANTEE MODEL
If an IATA travel agent opts for the bond/guarantee model the following documents must be
submitted:
- signed bond/guarantee overview together with the required surety (depending on the
amount of the BSP cash turnover and the payment intervals chosen) and
- signed master file sheet, showing the present address and the shareholder structure
The bond/guarantee overview will inform the IATA accredited travel of:
- what sureties/collateral are currently deposited with IATA,
- which turnover period is referenced for the guarantee currently required and
- what guarantee amount is currently required with monthly or periodical payments
If the guarantee deposited is sufficient, only the bond/guarantee overview must be filled in
accordingly and signed and the master file sheet reviewed and also signed. Should there
have been any changes in the shareholding etc. the form Notice of Change is to be
submitted. In the case of changes of address the new address must be entered into the form.
Should the guarantee/collateral deposited be insufficient or should the IATA travel agent have
deposited guarantee/collateral for a higher amount than necessary, the bond/guarantee must
be accompanied by either a new guarantee or by a guarantee for the difference additionally
required. Addendums declared by banks will also be accepted. It is also permissible for the
IATA travel agent to change the payment interval in accordance with the guaranteed
amounts. As soon as the documents will have been punctually submitted to IATA the process
can be completed.
Calculation of surety (hereinafter called target guarantee/collateral):
Monthly payment:
= BSP cash turnover in the latest available 12 turnover months, divided by 360 days,
multiplied by 50 days, rounded to 1,000 EUR (minimum: EUR 25,000).
Periodical (4 times per month) payment:
= BSP cash turnover in the latest available 12 turnover months, divided by 360 days,
multiplied by 29 days, rounded to 1,000 EUR (minimum: EUR 15,000).
190
Germany
191
Germany
Surety/collateral
Bnus classes
Liquidity rates in
%
250,000.00
> 250,000.00
< 400,000.00
>
140%
0%
> 130%
140%
25%
> 120%
130%
50%
> 110%
120%
75%
110%
100%
0%
25%
50%
75%
100%
Collateralization
40%
50%
60%
75%
80%
100%
40%
60%
70%
75%
80%
100%
30%
< 40%
50%
60%
75%
80%
100%
40%
65%
75%
80%
90%
100%
50%
60%
75%
85%
100%
60%
70%
80%
90%
100%
72%
75%
85%
100%
100%
50%
60%
70%
80%
100%
60%
70%
80%
90%
100%
70%
75%
85%
100%
100%
72%
80%
90%
100%
18%
< 30%
30%
< 40%
40%
10%
< 20%
20%
< 30%
30%
< 40%
40%
100%
The surety/collateral must be deposited by paying a percentage of the current daily turnover
into a transit account.
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Germany
4.2.
a)
b)
4.3.
IATA travel agents in the bonus category 1 with a target guarantee/collateral below EUR
400,000 do not need to deposit any additional surety/collateral. IATA travel agents in the
bonus categories 2 to 4 with a target guarantee/collateral below EUR 400,000 must deposit a
guarantee in the amount of the share of the target guarantee/collateral fixed for their bonus
category. IATA travel agents in the bonus categories 1 to 4 with a target guarantee/collateral
above EUR 400,000 and a BSP cash turnover share as defined in table 4.1 must provide
additional surety by keeping a transit account. IATA travel agents in the bonus categories 5
must always provide 100% surety in the form of a bank guarantee.
Guarantees considered in the actual current liquidity calculation remain with IATA, even
though the liquidity rate may be above 140%.
The BSP cash turnover portion is calculated from monthly BSP turnover during the previous
12 months. If the travel agent is obliged to keep a transit account, it can only be relieved from
that obligation, if it has gone below the relevant cash portion for 12 months running (i.e. not
on average).
As an alternative to keeping the transit account the IATA travel agent is entitled to provide a
bank guarantee in the amount of the target guarantee/collateral, multiplied by the relevant
transit account transfer rate.
During the course of a year IATA is entitled to require an adaptation of the above-mentioned
bank guarantees (alternatively to the transit account), if the travel agent increases the BSP
cash turnover for 3 months running by 10% in each month. In the framework of guarantee
adaptations, a current proof of financial solvency may also be required. Sample forms for
requesting such acceptance may be obtained from IATA.
4.4.
The Agent establishes a transit account, which is exclusively used for the administration of
BSP cash sales. For that purpose it is necessary that this account is assigned to IATA. IATA
provides a sample for such an assignment. After having obtained the declaration of
assignment, IATA will submit a copy thereof to the account-keeping bank. That bank must
confirm that it has arranged a blocking of the account in favor of IATA. IATA shall conduct a
supervising function regarding this account. This means that IATA shall monitor and confirm
that the percentage of the BSP cash turnover, as determined in table 4.1 has been
transferred on a daily basis to the transit account.
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Germany
Each time the required daily amount is not or not completely transferred to the transit account
on the agreed daily basis, IATA shall record this as an incident. IATA shall record an
additional incident each time the Agent fails to transfer such lacking amount on the following
day. Should 3 incidents occur within one calendar week, IATA shall request the Agent to
submit a bank guarantee within 30 days in the amount of the target guarantee multiplied by
the applicable transit account transfer quota. After receipt of the guarantee the transit account
will no longer be needed.
Should 4 incidents occur within one calendar year IATA shall remove the ticketing authority
from the Agent according to Resolution 818g, Appendix A, Section1, Chapter 1.7.7.2 and
initiate a review of the Agent.
On the Remittance Date the total amount according to the Billing must be available for direct
debiting on the transit account. If this is not the case, the standard Irregularity / Default
process according to Resolution 818g, Appendix A, Section 1 + 2 applies.
The Agent shall provide IATA with an authorization for debiting the Agents transit account
directly. In accordance with the BSP calendar of payments, the Agent must ensure that there
are sufficient funds in the transit account on remittance date.
4.5 Prerequisites for accepting loan agreements as a means for achieving the required
liquidity rate
Target
guarantee/
surety in EUR
250.000,00
> 250.000,00
< 600.000,00
None
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Germany
Target
guarantee/
surety in EUR
600.000,00
< 800.000,00
800.000,00
< 2.000.000,00
2.000.000,00
*Improvement of the liquidity rate by taking into account of a guarantee. The IATA-travel
agency must reach a liquidity rate of more than 110% by its own financial strength. Taking a
loan agreement into account is not permitted. Instead of that, a bank guarantee must be
provided, which helps the IATA-travel agency to reach a liquidity rate of at least more than
110%. Seeing that the individual rates can only be achieved by a bank guarantee, guarantees
remain with IATA.
**Only guarantees waiving the rights of preliminary injunction, protest and setting-off will be
accepted.
4.6 Personal guarantee
Starting from target guarantee amounts of more than EUR 250,000 the IATA travel agencies
are obliged in the case of a loan agreement being taken into account in achieving the
liquidity rate - to provide a personal, absolute guarantee by the owner, shareholder or
manager in the framework of the data collection sheet model. The amount depends on the
loan amount taken into account in calculating the liquidity rate. The wording must conform to
the sample as provided by IATA. IATA will exclusively accept guarantees, which conform to
the sample and are notarised.
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Ghana
GHANA
(Effective April 2009)
1.
2.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting
and settlement rules is contained in the BSP Manual for Agents supplied to each
Approved Location.
IATA offers regular BSP Procedures training sessions. Any agent wishing to
undertake such training is encouraged to contact the local BSP Office.
3.
License
The Agency must have a license issued by competent authorities / Government in
Ghana.
4.
Finances
Financial Statements
Audited annual financial statements duly certified by a certified public accountant
/auditor disclosing airlines sales and aged debtors must be produced annually and
supplied to the ASO within 6 months of the agents financial year-end.
The accounts should reflect a satisfactory financial standing i.e.:
(a) Positive Net Profit
(b) Positive liquidity ratio with a minimum of 1:1
(c) Positive Net Equity / shareholders interest.
(d) An established IATA agent must have a minimum paid up Share Capital of twenty
thousand United States Dollars or equivalent in Ghana Cedis.A minimum paid up
Share Capital amounting thirty thousand United States Dollars or equivalent in Ghana
Cedis is required from an agent who is just joining the BSP.
Should the audited accounts indicate that the Agent is insolvent, IATA shall
immediately invoke procedures for the removal of the agent from the Agency List. If
the position is not redressed within 30 days, the Agent's agreement will be terminated
in accordance with the provisions contained in the applicable Passenger Sales
Agency Rules.
196
Ghana
5.
Financial Review
Notwithstanding the periodic examination of the financial standing of Agents as per the
rules in the appropriate IATA Resolutions, the ASO Office may determine that an
Agent is required to undergo a financial review.
6.
Guarantee
6.1
An acceptable bank guarantee will be based on average 4 weeks net cash sales. This
guarantee will be reviewed on yearly basis.
6.2
IATA/BSP will have the right to request for additional guarantee if the average sales
exceeds by 20% during a period of any 3 months.
6.3
Bank guarantees and additional guarantees MUST be submitted to the ASO within 60
days or 30 days before expiry of the existing guarantee whichever is earlier. The
renewal of the guarantee should be done before the former one expires.
6.4
BSP will be mandated to remove STDs, cause the removal of ticketing authority and
place the agency under review if the agent fails to provide additional guarantees as
requested.
6.5
A minimum value of fifty thousand United States dollars, USD 50 000.00. Bank
Guarantee will be from the country Head Office of the Bank for new applicants.
6.6
All Bank guarantees must be drawn as per the IATA guarantee specimen and should
have one-year validity.
6.7
Each approved location of an agent shall be treated as an independent agent for the
purpose of provision of bank guarantee as well as for declaration of default.
7.
Reduction of Guarantee
To qualify for any reduction in the guarantee amount, the agent must comply with the
following:
7.1
The agent should not have a history of irregular payments and never be in default due
to agents fault in the last twelve months.
7.2
7.3
The Agent should not have more than 2-recorded instances of irregularities for late
payment against the Agency in the previous 12 months; and, on change of ownership,
the instances of irregularities in the last 12 months recorded for the Agency falls away.
7.4
The Agent must not have been placed into default in the preceding 3 years of trading.
The reduction in the guarantee will be as follows:
197
Ghana
Percentage of Waiver
Nil
10%
20%
30%
40%
Notwithstanding the guarantee reductions listed above, the minimum guarantee from
any agent will not be below fifty thousand United States dollars, USD 50 000.00,
8.
Profitability
Agents must operate their business with the intention of making a profit.
9.
New Applicants
Must have been in operation for 12 consecutive months as a travel agent before
applying for IATA approval.
A bank guarantee will be required based on an average 4 weeks cash trading.
10.
10.1
10.2
Change of ownership
Very importantly and bearing in mind this privilege is applicable once there is
an uninterrupted ownership for the number of years applied for.
11.
A minimum paid up Share Capital of thirty thousand United States dollars or its
equivalent in Ghana Cedi.
A minimum guarantee from any agent will not be below fifty thousand United
States dollars, USD 50 000.00.
-Plus 1 year trading to secure IATA approval and to join the BSP.
11.1
11.2
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Greece
GREECE
(Effective 1 June 2010 PAC/32)
FINANCES
Agents during the first two years of trading
Bank guarantee
To be provided by all agents during the first two years of trading as an Agent. Guarantee
should not be for a limited period.
Amount of guarantee required: The amount will be calculated on the basis of the estimation,
as provided by the applicant, of the agent's BSP cash turnover in his first year as IATA
accredited agent, adjusted for the number of Days' Sales at Risk.
The number of Days' Sales at Risk is to be counted from the beginning of the reporting
period to the remittance date in respect of that reporting period or periods, plus a margin of
five days. The result is to be divided by 360 days, and then applied to the annual cash
turnover estimation to calculate the estimated Amount at Risk and the amount of guarantee
required.
The minimum amount of the guarantee is EUR 25,000.
The local IATA manager will review the level of the guarantee after the first six months based
on the Amount at Risk computed with reference to the average net cash sales of the Agent
during that six-month period. The amount of guarantee required will be increased if it is found
to be insufficient to cover the Amount at Risk.
Thereafter the Amount at Risk will be computed using the average annual net cash sales of
the previous 12 months and the amount of guarantee required adjusted by the IATA manager,
if necessary.
Agents which have completed two years of trading
Agents which have completed two or more years of trading will be given the option to:
continue to provide a guarantee. The adequacy of the agent's guarantee will be reviewed
in the first quarter of every year based on the business of the previous calendar year. or
submit audited financial statements for the most recent year-end. These statements must
not be older than six (6) months. The profit & loss accounts must be for a period of at
least twelve months.
In the event of default, agents will be required to furnish a bank guarantee for two years,
amount equivalent to sales at risk. After the two years the same options apply as for new
applicants.
199
Greece
200
Greece
Default
In the event of default, agents will be required to furnish a bank guarantee for two years,
amount equivalent to sales at risk. After the two years the same options apply as for the new
applicants.
License
National Tourism Organisation License is required.
201
Gulf Area
FINANCIAL
Requirements for New Applicants (with no previous trading history)
The following documents should be submitted:
Applicants must provide a bank guarantee for the greater of the following:
a.
For those Agents volunteering to remit on a more frequent basis (four times per
month) an amount calculated based on estimated average monthly sales
provided by the applicant multiplied by a factor of 0.7;
For those Agents remitting on the standard remittance calendar (twice per
month) an amount calculated based on estimated average monthly sales
provided by the applicant multiplied by a factor of 1.25; OR
b.
Requirements for Existing Agents (those with trading history e.g. non-IATA)
The following documents should be submitted:
Net sales (market fares) airline wise on all IATA airlines for a period of 12 months
For those agents volunteering to remit on a more frequent basis (four times per
month), a Bank Guarantee that covers the average sales of the immediately
preceding 12 months multiplied by a factor of 0.7 subject to a minimum of
USD100,000 (One Hundred Thousand US Dollars)
For those agents remitting according to the standard remittance calendar (twice
per month), a Bank Guarantee that covers the average sales of the immediately
preceding 12 months multiplied by a factor of 1.25 subject to a minimum of
USD100,000 (One Hundred Thousand US Dollars)
202
Gulf Area
Financial Review
Newly Accredited Agents (those with no prior trading history)
Newly accredited agents will be subject to Financial review within six (6) months of the
approval date and/or submission of the provisional Bank Guarantee, and accordingly will
be required to submit a revised Bank Guarantee based on:
o
For those agents volunteering to remit on a more frequent basis (four times per
month), a Bank Guarantee that covers the actual average sales of the immediately
preceding 6 months multiplied by a factor of 0.7 subject to a minimum of USD100,000
(One Hundred Thousand US Dollars
Agents remitting according to the standard remittance calendar (twice per month), a
Bank Guarantee that covers the actual average sales of the immediately preceding 6
months multiplied by a factor of 1.25 subject to a minimum of USD100,000 (One
Hundred Thousand US Dollars)
Existing Agents
A financial review of an Agent will be completed in the following circumstances:
On an annual basis.
Based on the review the agent will be required to submit a revised Bank Guarantee based
on the following:
For those agents volunteering to remit on a more frequent basis (four times per
month), a Bank Guarantee that covers the actual average sales of the immediately
preceding 12 months multiplied by a factor of 0.7 subject to a minimum of
USD100,000 (One Hundred Thousand US Dollars
Agents remitting according to the standard remittance calendar (twice per month), a
Bank Guarantee that covers the actual average sales of the immediately preceding 12
months multiplied by a factor of 1.25 subject to a minimum of USD100,000 (One
Hundred Thousand US Dollars)
Audited financial statements within 6 months of the end of the agent's financial year
(comprising a balance sheet, income statement, statement of changes in equity and
statement of changes in cash flow. Financial statements must disclose the existence of
preferential claims on the assets, contingent liabilities and details of any pending
litigation).
Common Requirements
In case of new and/or existing agents with multi-locations (branches and/or implants), the
financial documents of the approved and operating HO should be submitted. Consequently
the financial security (BG) should cover the entire agency network.
Periodic & Ad-hoc Reviews shall be constructed in accordance with the established
applicable Resolutions
203
Gulf Area
Bank guarantee must be submitted to the IATA office within 4 weeks of the date of
request.
Bahrain: Commercial registration from the Ministry of Commerce, License from the
Ministry of information and Tourism Affairs.
Qatar: Civil Aviation Authority, Ministry of Economy & Trade and Municipality.
Oman: Commercial Registration from the Ministry of Commerce, License from Ministry of
Tourism and Chamber of Commerce and Industry.
204
1.
Finances
1.1
New Applicants
Applicants must:
a) be established and in business as a travel agent for not less than 18 months from the
date of licensing prior to the date of application, and
b) have as a minimum paid-up capital of HKD 500,000;
c) after accreditation, contribute to the Industry Trust Fund in accordance with its terms and
conditions as determined by the Agency Programme Joint Council HKG SAR from time
to time.
d) submit a certified complete set of audited financial statements which must not be older
than 9 months at the time of assessment and in the auditors opinion, the financial
statements give an unqualified true and fair view of the state of the companys affairs.
Accredited Agents
Accredited Agents must submit annually a certified complete set of audited financial
statements which must not be older than 9 months at the time of assessment and in the
auditors opinion the financial statements give an unqualified true and fair view of the state of
the companys affairs.
When assessing whether the applicant or Agent meets the financial standing the following
shall be taken into account using the criteria set out in section 1.3:
a) availability of adequate liquid funds to meet normal trading commitments,
b) capital required to be commensurate with fixed assets,
c) the existence of preferential claims on the assets and the existence of contingent
liabilities.
If Agents are unable to submit their audited financial statements within 6 months, their
auditors must write to IATA to state the reasons for the delay and to advise submission dates
on which the Agent will provide the audited financial statements but the date must not exceed
9 months.
205
1.2 Definitions
a. Encumbrance
Encumbrance means any asset of the applicant or Agent which has been pledged to any
person for the security of any arrangement granted by any person for the benefit of any
person other than the applicant or Agent.
b. Related party
A related party means any shareholder or director and their immediate families, trustees or
partners, associated and subsidiary companies, holding companies and their associated and
subsidiary companies, or related company.
c. Intangible
Intangible includes goodwill, trademarks, royalty, deferred expenses, deferred cost of
advertising.
d. Contingent liability
Contingent liability does not include bank guarantee provided for trade creditors of the
applicant or Agent.
e. Tangible net worth
Tangible net worth is the aggregate amount of:-paid-up share capital;
-reserves;
-professional property revaluation reserves; and
-retained profits;
minus
-retained losses;
-intangibles;
-encumbrances;
-deferred tax assets;
-contingent liabilities; and
-net amount of loans to related parties.
1.3 Financial Criteria
To meet the financial criteria, the applicant or Agent must have a minimum score of 85.
Test 1 Tangible Net Worth
A minimum requirement of HKD 500,000 or 150% of the amount of net loss after tax for the
immediately preceding financial year, whichever is higher. The loss must be increased by the
amount of expenses which in normal circumstances should have been charged, for example,
the fair market price of rent for office premises provided rent-free.
206
Score
Tangible Net Worth
HKD 500,000 or 150% of the amount of net loss after tax, whichever 80
is higher
< HKD 500,000
0
Test 2 Working Capital Ratio
Score
10
5
0
Score
10
5
0
Where the applicants or Agents overall score is below 85 and it does not have any
Tangible Net Worth deficiency:
In the form of injection of paid-up capital and/or bank guarantee/insurance bond
Where the applicants or Agents overall score is below 85 and its annual turnover is
below HKD 20 million:
207
In the form of injection of paid-up capital and/or bank guarantee/insurance bondif the
difference between the Tangible Net Worth and the minimum requirement is below HKD
1 million
In the form of bank guarantee/insurance bond, if the difference between the Tangible Net
Worth and the minimum requirement is HKD 1 million or above
Where the applicants or Agents overall score is below 85 and its annual turnover is HKD
20 million or above:
In the form of injection of paid-up capital and/or bank guarantee/insurance bondif the
difference between the Tangible Net Worth and the minimum requirement is below HKD
3 million
In the form of bank guarantee/insurance bond, if the difference between the Tangible Net
Worth and the minimum requirement is HKD 3 million or above
Total
Score
=>85
<85
Annual
Turnover
N/A
N/A
<85
<85
<85
<85
c. Unsatisfactory
Where the applicants or Agent's financial standing has not been found satisfactory without
condition and request to provide additional financial support has not been complied with on or
before the deadline.
1.5
For applicants and Agents, the amount of bank guarantee/insurance bond required is
equivalent to the applicants average 33-day BSP cash turnover based on the previous 6
months. Minimum bank guarantee/insurance bond amount is HKD 50,000.
2. Licence
The applicant or Agent must be in possession of a valid licence from the Registrar of Travel
Agents to operate as a travel agent.
208
Hungary
HUNGARY
(Effective 19 November 2010 PAC/33)
A)
An Agent applying for IATA accreditation must be in operation as a travel agency for
12 consecutive months.
B)
New applicants for approval are requested to submit the Balance Sheet and Profit and
Loss Statement, duly certified by an outside public accountant for the most recent
financial year.
C)
New applicants must have an individual bank guarantee or insurance bond of HUF
10.000 000.-, - valid for one year period. Newly approved agents will be reinvestigated
on a monthly basis and the amount of the guarantee will be adjusted if the guarantee
in place is less than 85 % of the guarantee needed. There will be a financial review
should a major change in the financial stability/ownership of the agency occur.
D)
Accredited Agents are obliged to submit a copy of their annual report and accounts
within 6 months after the end of their financial year. All Agencies will be reassessed
every year, in order to determine their financial stability. When the applicant is a
subsidiary of a larger parent organisation then a copy of the audited accounts for the
parent company must also be submitted. In the case of private or individually owned
organisations (not LTDs) a certified statement of the owners capital assets must be
added.
E)
All IATA Accredited Agents are requested to submit a financial guarantee. They have
the option between either a bank guarantee or an insurance program.
F)
1.
A bank guarantee equal to 1/12th of the BSP cash sales of the last 12 months.
The bank guarantee shall preferably be with unlimited validity or with at least a
minimum validity of 1 year. The bank guarantee may only be cancelled if IATA
has approved this cancellation. IATA HU reviews the level of the bank
guarantee on a continuous base and will request an increase if the guarantee
in place is less than 85 % of the guarantee needed. One month notice is to be
applied for submitting a revised bank guarantee.
2.
All locally approved IATA Agents must fulfill the local financial criteria, i.e. no parent
company guarantee is accepted. Global guarantees can be accepted if validated by
IATA HQ.
License
y Court registration
y Valid license to trade as a Travel Agency
209
India
INDIA
(Effective 1 June 2011)
Bank Guarantee or Insurance Cover shall cover the Agents average 35 days cash
sales (productivity) during the 12 months immediately preceding the date when
such computation/determination is made.
2.
NB:
All providers of Financial Guarantees or insurance cover shall be only those
approved by IATA and financial evaluation by the financial assessor of IATA will be final.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location.
IATA offers regular online training modules on BSP Essentials for Agents.
interested in such training is encouraged to contact the local BSP office.
Any agent
210
Indonesia
INDONESIA
(Approved OA/29, December 2010)
1. Finances
1.1 the applicant must provide a certified or properly audited balance sheet and Profit and
Loss account statement not older than six months at time of submission. This statement has
to be audited by a Registered Public Accountant who is a member of the Association of
Indonesian Public Accountants.
1.2 applicants must:
1.2(a) have as a minimum paid up capital of IDR 500,000,000 or as required by the
Directorate General of Tourism regulations;
1.2(b) submit a satisfactory banker's report;
1.2(c) submit a minimum financial guarantee of not less than the average of the respective
BSP credit term period's turnover or USD 15,000, whichever is higher, in the form of bank
guarantee or insurance as established from time to time;
1.2(d) be in airline trading business as a travel agent not less than six months prior to the date
of application
1.3(a) when assessing whether the applicant meets the financial standing described in
Subparagraph 1.1 of this Paragraph the following shall be taken into account:
1.3(a)(i) Working Capital
Current year>Previous year
Current year=Previous year
Current year<Previous year
10
7.5
5
15
11.25
7.5
3.75
35
17.5
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Indonesia
15
11.25
7.5
15
11.25
7.5
3.75
10
7.5
5
1.3(a)(vii) Based on the above 6 tests and the allocation of applicable points to each test, a
total of 60 points or more is considered satisfactory providing that the Applicant maintain the
minimum level of paid up capital.
1.3(a)(viii) A financial guarantee equivalent to the sales at risk amount is required for any
existing accredited IATA agents who fail the criteria as set forth in 1.3(a)(i)-(vii). The number
of Days Sales at Risk is to be counted from the beginning of the reporting period to the
remittance date in respect of that reporting period or periods, plus a margin of five days. The
result is to be divided by 360 days and then applied to the annual cash turnover estimation to
calculate the estimated Amount at Risk and the amount of guarantee required.
1.3(a)(ix) It is recognized that different interpretations of financial accounts are possible and
do occur. Accordingly, the Financial Assessor shall have discretion as to the most
appropriate classification in accordance with standard accounting practices for all items
included in the statements. It is in the applicants best interest to supply any additional
information that has a bearing on the review.
2. Premises
If located on the premises of an organization, plant or commercial firm and dedicated
substantially to the travel requirements of that organization, plant or commercial firm, be a
Branch of an existing Accredited Agent and meet all the qualifications of this Section, except
that it need not be freely accessible to the general public.
3. Licence
The applicant must be in possession of a valid license from the Directorate General of
Tourism and the respective local government authority.
212
Ireland
IRELAND
(Effective 1 September 2010 Mail Vote A187)
Financial Assessment Applicable to New Applicants and IATA Accredited Agents
The financial standing of IATA New Applicants and of IATA Accredited Agents is evaluated by
IATA.
It is important that only agents who demonstrate their ability to settle their liabilities will be
accepted and the financial criteria have been set with the objective of ensuring that only
financially sound applicants are accredited.
The Settlement dates in Ireland are:
The 16th of the month following the month of sales, for Agents settling their BSP
liabilities once per calendar month
The 1st and 16th of the month following the month of sales, for Agents settling their
BSP liabilities twice per calendar month
8 days after each reporting period for Agents settling their BSP liabilities four times
per calendar month. The reporting periods are: 1-7th, 8-15th, 16-23rd and 24th to the
end of the calendar month.
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Ireland
(a) Equity (for limited companies) or Capital account (for partnerships & sole traders)
This is based on the projected annual turnover of the agency for airlines sales including
revenue to non-IATA airlines participating in the BSP and less substantiated credit card sales.
The levels of equity required are shown below and must be met without exception. The total
equity must not fall below the levels stated hereunder. Equity for this purpose is capital paid
up, reserves, and profit and loss carried forward.
There are two levels set the normal minimum for companies that have traded for less than 3
years, and the traded minimum for companies that are able to submit 3 consecutive years
accounts.
Turnover up to (EUR)
1 million
2 million
3 million
4 million
5 million
6 million
7 million
8 million
9 million
10 million and over
3 Years Accounts
40,000
50,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
40,000
40,000
40,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
(b) Liquidity
An Agent is required to meet one of the following:
b1) If an Agents Net Current Assets meet or exceed 12% of cash sales of their annual BSP
turnover (net to be paid), the Agent can remit on a monthly basis.
b2) If an Agent does not meet b1) above and their net assets (as defined below) meet or
exceed 7% of cash sales of their annual BSP turnover (net to be paid), the Agent must remit
on a bi-monthly basis, unless the Agency provides a financial security (bank guarantee/
insurance bond) of 12% of yearly BSP Cash Sales turnover (net to be paid) or joins the Trust
Fund.
b3) If an Agent does not meet b1) or b2) above (i.e. if their net assets as defined, are below
7% but above zero), the Agent must remit bi-monthly and: b.3.1. must provide a financial
security (bank guarantee/ insurance bond) or b.3.2. join the Trust Fund or else remit 4 times
monthly.
b4) if an Agents current liabilities exceed current assets the Agent must remit 4 times
monthly and provide a financial security (bank guarantee/ insurance bond).
In the event of current liabilities exceeding current assets the level and quality of an Agents
fixed assets will be taken into consideration except under b1 above. Only freehold properties
will be taken into account provided:
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Ireland
The value of total charges over the property is disclosed by the Agent in the audited
accounts;
The value of the property should be stated in the audited accounts and should be
certified by a qualified valuer, i.e. a professional auctioneer or real estate agent;
The valuation of the property should not be older than three years with the date of
valuation stated in the audited accounts.
(c) Profitability
Agency accounts must show a profit before tax in at least 1 year within the last 3 financial
years. This requirement will be applicable to annual accounts falling due for review as from
01 January 2013 onwards.
Financial Security (bank guarantee/ insurance bond) requirements
For new Applicants
A financial security (bank guarantee/ insurance bond) will be required for the first three years
of trading as an IATA Accredited Travel Agent.
For accredited IATA Agents a financial security (bank guarantee / insurance bond) will be
required if your annual accounts show that:
(a) You do not meet either of the requirements in a, b or c above
(b) Your company undergoes a significant change of ownership (see below).
The financial security levels will be as follows:
Calculation of financial security requirement for new applicants or accredited agents
who are non IATA Trust Fund Members
Monthly Payment
Bi Monthly Payment
215
Ireland
216
Italy
ITALY
(Effective 1 July 2011 Mail Vote A197)
Finances
Balance Sheet and Profit and Loss Account (duly certified by an outside public accountant)
indicating a satisfactory financial standing. If an applicant or Agent is required to provide
additional financial support the following are acceptable:
-
bank guarantee, insurance coverage, letter of undertaking from mother company (in
specific cases). Other alternatives will be examined case-by-case.
____Equity__
Bank & Loans
Total Assets
Equity
__ Total Purchases___
Total Accounts Payable
_________Sales________
Total Accounts Receivable
Once the five indexes are determined, a value is assigned to each of them according to an
agreed table. If the total value reached is between 0 and 50, the applicant does not qualify,
between 50 and 80 the applicant is required to supply additional financial support and from 80
and 100 the applicant qualifies without condition.
Applicants On the basis of financial situation and of ascertained productivity or minimum
Commercial Risk Average of the region.
Changes of Ownership On the basis of new Balance Sheet and of BSP productivity.
Reviews Where a discrepancy between the guarantee level and productivity is
ascertained, review will take place based on new Balance Sheet/productivity, requiring
realignment in a maximum of 60 working days from the date of the request in accordance with
following scale:
y
y
217
Italy
Minimum Amount
Euro 26,000.00 is the minimum bank guarantee level to be applied to all BSP operating
agencies irrespective of the average of their cash sales.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location. Additional copies if needed can be requested through your local BSP contact.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
License
Required (except for Vatican City).
218
Japan
JAPAN
(Effective 1 June 2011)
FINANCE
1.
Financial Statements
Balance Sheet (BS), Profit & Loss Statement (PL) and the detailed statements,
showing the most recent two terms, certified by an independent CPA or ZEIRISHI
(Certified Tax Accountant), shall be submitted to IATA.
Time limit of submission is:
-
2.
Financial Criteria
(1)
(2)
(3)
The agent must have minimum paid-up share capital in the sum of JPY 10,000,000
The financial statements must show minimum net worth of JPY 30,000,000.
Equity Ratio shall exceed 5 % and up
3.
Financial Guarantee
Accredited agents are required to submit the financial guarantee with IATA in
accordance with this Paragraph.
(1)
Form
1.
2.
3.
Bank Guarantee
Travel Agency Bond provided by the insurance company
Other Form that IATA approves
The financial coverage issuer must have the license granted by Financial Services
Agency, The Japanese Government.
Financial support in the form 1 through 3 above should be renewed annually with the
amount reassessed in accordance with (2) below.
219
Japan
(2)
Amount
21/365 of the previous 12 months BSP cash sales or minimum of JPY 10 million
whichever is higher, but not more than JPY 500 million, is applied. When the sales at
risk are less than JPY 5 million, JPY 5 million is applied.
At the first year, the amount should be calculated on the basis of the estimation, as
provided by the applicant, of the agents BSP cash turnover in the first year. Such
level is reviewed within the six month based on the Amount at Risk computed with
reference to the average net cash sales of the Agent during that six months period.
The amount is required to be increased if it is found to be insufficient to the cover the
Amount at Risk.
If the applicant is unable to submit the one-year financial statement, the sales at risk of
forecast of BSP Cash Sales or JPY 200 million, whichever is higher, but not more than
JPY 500 million, is applied.
<Note 1>
For Agent whose financial standing and good trading record satisfies the following
criteria, the amount is calculated in accordance with this Note.
-
<Note 2>
When an IATA accredited agent owns 67% or more share of another IATA accredited
agent, the consolidated financial statements are established, the financial statements
satisfies the criteria and the keep good BSP transaction record, such agents are
deemed as grouped and eligible to submit the group bank guarantee. New applicant
and Change ownership case cannot be deemed as a group for at least 1 year after
such application has been approved and thereafter, status granted. An IATA
accredited agent shall submit application together with documents required to IATA if
they wish to group the subsidiary.
220
Japan
Trading History
The applicant, its managerial staff or its principal stockholders (or persons for whom they act
as nominees), directors or officers or managers shall not have been found guilty of wilful
violations of fiduciary obligations incurred in the course of business nor be undischarged
bankrupts; any Member holding such information shall immediately inform the Agency
Services Manager accordingly.
221
Jordan
JORDAN
(Effective 1 January 2009)
FINANCIAL STATEMENT
1.1.1
b.
For applicants who have just commenced trade without financial records, the
following should be submitted:
1.
2.
3.
1.2
1.3
a.
b.
c.
b.
The financial ratios minimum levels given in 1.2 paragraph must be always
met, and will be the base of deciding additional financial security requirements
(i.e. Higher Bank Guarantee, or Default Insurance Policy), as deemed
necessary by the Financial Assessor.
222
Jordan
2.
FINANCIAL SECURITIES
2.1
All new applicants and accredited agencies are required to comply all the time with the
financial security requirements as decided in the locally established criteria of Jordan,
even if the financial review of a new applicant and/or an accredited agency reflects
achieving or exceeding the minimum financial ratios given in 1.2 paragraph.
2.2
One of the following two methods of Financial Securities are decided by the APJC:
a.
Bank Guarantee
(i)
New applicants that did not commence trade yet, or just commenced trading, without
sales record, will be required to submit a Bank Guarantee of JOD 40,000.00 as a
minimum level of financial security. The minimum level could be increased if the ASO
has reasons indicating financial risk
(ii)
New applicants that had commenced trade with sales record (i.e. sales out side BSP
umbrella) will be required to submit a Bank Guarantee of JOD 40,000.00 as a
minimum level of financial security, or Bank Guarantee levels higher than JOD
40,000.00 as decided by the ASO based on new applicants sales record and any
other financial risk indicator assessed by ASO
(iii)
All accredited agencies will have to under go an annual Bank Guarantee adjustment
process, by which the ASO will communicate to each agency its highest sales level in
3 (three) cumulative months (and not necessarily consecutive) during the previous
year (JAN-DEC), divided on 3 (three), which will be new Bank Guarantee level for the
accredited agency. The new Bank Guarantee level will be communicated to the
concerned agencies
st by ASO in JAN of each year, with a deadline to comply by no
later than MAR 31 or the next working day, should that date is a non-working day
(iv)
For accredited agencies with less than JAN-DEC BSP sales record, the same rule
mentioned in (iii) will be applied as well.
(v)
ASO will communicate the Bank Guarantee adjustment level, only to the agency with
an increase requirement. However, Agencies have the right to request reducing the
Bank Guarantee level based on a decrease in the sales record of previous years
highest 3 months average sales, provided the decrease will always comply with the
minimum JOD 40,000.00 Bank Guarantee requirement
(vi)
b.
(i)
Is an optional financial security method which the agencies might choose, instead of
the basic Bank Guarantee method
(ii)
The DIP accepted in BSP JO is the one discussed by the 20TH APJC JO meeting held
on APR 17TH, 2008, and the implementation to start on SEP 1ST 2008, or the date of
obtaining concerned parties signature, as decided by the 21ST APJC JO meeting held
on AUG 3RD, 2008.
(iii)
Any change in the Policy rules and conditions and/or in the Insurance Company, must
be first discussed and processed first through the APJC JO Council.
223
Kazakhstan
KAZAKHSTAN
(Effective 1 January 2011 PAC/33)
New Applicants
New applicants must have been in operation for 12 months as Air Travel Agent before
applying for IATA approval. The Agent must be in possession of a valid license / certificate to
relative types of activities (if required) issued by appropriate state authorities according to
Kazakhstan legislation.
The complete file to be sent to the IATA Accreditation Office, consisting of the following:
Finances
IATA Agency Services Manager may conduct periodic examinations of the financial standing
of an Agent. He/she may request and the Agent concerned shall be under obligation to
furnish, by the date specified in Agency Services Manager's letter of request, the documents
deemed necessary to conduct such examination.
Failure by the Agent to submit such documents as prescribed shall be grounds for BSP
Manager to suspend such Agent from the BSP until such documents are submitted to the
Agency Services Manager.
The Agent should inform the Agency Services Manager of any change in of location,
ownership, legal registration, license deprivation or change of staff. In case of change of
staff, the Agent should submit to the Agency Services Manager the names of the new
qualified staff according to the criteria above within 3 months.
Financial Review & Financial Guarantee
Financial Review of an Agent will be completed in the following circumstances:
Default
New applicants
By request of the IATA Agency Services Manager
224
Kazakhstan
The Agent shall submit the following documents for the past financial year, prepared in
accordance with the Kazakhstan accounting practices both on paper and in an electronic
format.
Balance Sheet
Profit and Loss Account
Credit and Debt Statement.
Cash Flow Account
2) Solvency ratio measures the ability of an agent to cover its long term debts. Capital here
includes any issued capital, reserves and retained earnings. Total liabilities include all the
payables, borrowings, provisions and any other liabilities (both short and long-term).
Solvency =
Capital
=
Total Liabilities
3) Profitability is a measure of an agents ability to generate profit out of its turnover. Net
income in this ratio is the profit after tax and total revenue is the commission income
(excluding ticket price) that an agent gets before incurring expenses.
Profitability =
Net income
Profit after tax
=
Total Revenue
Gross revenue from ticket commissions
225
Kazakhstan
4) Cash flow is the statement of cash movement where both cash inflows and cash outflows
within a period are reflected.
All Accredited Agents are required to present a Bank Guarantee or Insurance
Bond/Certificate, issued by recognized bank/insurance company. Such documents are
issued for the Head Office of the Agent for coverage the full Amount of Risk of its all
Accredited Branch Offices/Locations, pursuant to any discounts or supplements to the Bank
Guarantee or Insurance Bond/Certificate which the Agent may be eligible for, or obliged to,
under the scheme below.
The list of financial institutions that are authorized to issue Bank Guarantee or Insurance
Bond/Certificate is approved by IATA. All financial guarantees must be drawn as per IATA
templates.
The Amount at Risk is calculated as 1/24 of the last 12 months turnover and will be rounded
to the next + 5,000 USD, but it cannot be less than 100,000 USD. In case of new applicant,
the Amount at Risk is based on the declaration of the agent about previous sales volumes.
Agents with an Amount at Risk over US$200,000 are classified into groups A-D. The stronger
the financial status as defined by the criteria, the bigger the discount from the 100% financial
guarantee. This will apply to agents who have not defaulted in BSP Remittances for two
calendar years; with the discount increasing in the cases of Group A, B and C, after three full
years.
As an exception, those agents who have been trading in BSP without default for 2 full
calendar years as of 01 Jan 2011, will be entitled to the discounts defined for those agents
trading for 3 full calendar years. This exception will not be applicable beyond 01 Jan 2011.
Only agents with an Amount at Risk over US$200,000 will be eligible for the discount scheme.
Group A
Result
226
Kazakhstan
Group B
Result
Group C
Result
Group D
Result
In order to qualify for any group all criteria of that group must be met. If criteria of different
groups are met, then the agent will be qualified to a group with the lowest discount among the
groups which the agent met the criteria of.
227
Kazakhstan
Additional Agent Group Classifications:
Group E: Where agents meet the criteria as defined in Group A, has not defaulted in BSP, but
the Amount at Risk is less that US$100,000. No discount from the Financial Guarantee is
provided and as such the agent provides the minimum guarantee equal to US$100,000.
Group F: Where agents meet the criteria as defined in Group A, has not defaulted in BSP, but
the Amount at Risk is greater than US$100,000, but less than US$200,000. Or where the
agents meets the criteria as defined in Group A, has defaulted once in BSP, and the Amount
at Risk is greater than US$100,000. The result is that no discount from the Financial
Guarantee is extended.
Group G: Where agents have not defaulted in BSP previously and upon review one out of
Criteria 1,2 or 3 is not met; agents will be required to provide a Financial Guarantee at 105%
of the Amount at Risk. In additional, where agents have not defaulted in BSP previously and
upon review two out of Criteria 1,2 or 3 are not met; agents will be required to provide a
Financial Guarantee at 110% of the Amount at Risk. All agents classified in Group G must
have a positive Cash Flow.
Group H: Where agents have defaulted in BSP once previously and upon review one out of
Criteria 1,2 or 3 is not met; agents will be required to provide a Financial Guarantee at 110%
of the Amount at Risk. In addition, where agents have defaulted in BSP once previously and
upon review two out of Criteria 1,2 or 3 are not met; agents will be required to provide a
Financial Guarantee at 115% of the Amount at Risk. All agents classified in Group H must
have a positive Cash Flow.
Group I: Where agents have defaulted in BSP twice previously and upon review one out of
Criteria 1,2 or 3 is not met; agents will be required to provide a Financial Guarantee at 120%
of the Amount at Risk. In addition, where agents have defaulted in BSP twice previously and
upon review two out of Criteria 1,2 or 3 are not met; agents will be required to provide a
Financial Guarantee at 130% of the Amount at Risk. All agents classified in Group I must
have a positive Cash Flow.
Group J: Where agents have defaulted in BSP more than twice. For agents where, upon
review, none of Criteria 1,2 or 3 are met. For agents who have a negative Cash Flow. Agents
in Group J are not admitted to BSP (for new applicants) or are excluded for existing BSP
Members.
Note: for agents classified in Groups H & I (where the agent has defaulted), the agent will be
suspended from BSP until the supplemented Financial Guarantee is received by IATAa
Agency Service Manager.
Two months before the expiry date of the current Bank Guarantee or Insurance
Bond/Certificates, the Agency Services Manager shall inform the Agent about the Amount at
Risk to be covered by the new guarantee. Such new guarantee shall be valid at least for 12 6
months.
Amount at Risk will be reviewed every six months. When such review shows substantial
increase or decrease of the Amount at Risk, the Agency Service Manager shall require an
amendment in the existing guarantee with 2 months pre-notice.
Such amendment shall be requested only if the newly calculated Amount at Risk satisfies
both criteria as specified below:
228
Kazakhstan
Amount at Risk band (USD)
From / To
100,000 - 200,000
200,001 - 500,000
500,001 - 1,000,000
1,000,001 - 2,500,000
Over 2,500,000
Criteria A
>25%
>20%
>15%
>10%
>5%
Criteria B (USD)
>50,000
>100,000
>150,000
>250,000
>250,000
229
Kazakhstan
General
In respect of the issue of Traffic Documents after approval, an Agent shall comply with the
provisions of Resolution 822 to the extent that they affect the Agent's obligations or actions.
Traffic Documents shall be completed, validated and issued only by Approved Location. The
applicant must not have a name which is the same as, or is misleadingly similar to, that of an
IATA Member, or IATA, or IATA accredited agent.
GSA Appointments
The applicant must not be a General Sales Agent for any air carrier in Kazakhstan (whether
or not for the whole of that country).
Completeness of applications
Submission of all application forms and financial documents has to be done electronically in
PDF format. Paper files are submitted only upon request by ASO Manager.
230
Kenya
KENYA
(Effective 1 January 2011 PAC/33)
FINANCES
1.
Financial Statements
Audited annual financial statements duly certified by a certified public accountant
disclosing airlines sales and aged debtors must be produced annually and supplied to
the ASO as follows:
(a)
2.
Financial Security
The Agent must provide a Financial Security as approved by IATA. This may include a Bank
Guarantee, approved Insurance Bond or approved Default Insurance Programme.
3.
Bank Guarantee
(a)
(b)
(c)
(d)
(e)
(f)
Options for all agents will be frequent remittance for a reduction of 40% of the
guarantee.
IATA/BSP will have the right to request for additional guarantee if the average
sales exceeds by 50% during a period of any 4 months.
Bank guarantees and additional guarantees MUST be submitted to the ASO
within 4 weeks from the date of request.
BSP will be mandated to remove CIPs and Traffic documents if the agent fails
to provide additional guarantees as requested.
All guarantees must be drawn as per the IATA guarantee specimen.
________________
1
Cash trading means all sales less credit card sales.
231
Kenya
(g)
The maximum paid-up capital to be used for reduction of the guarantee will be
limited as follows:
(i)
(ii)
4.
Reduction of Guarantee
The adjustment of the guarantee amount will depend on the following:
(a)
The agent must have been an approved IATA travel agent for over 7 years.
(b)
The agent should not have more than 2 instances of irregularities for late
payment issued against the agency in the previous 12 months
(c)
(d)
The agent must not have been in default (due to the agent's own fault).
(e)
A change of name will not affect the agent's record of irregularities over the last
12 months.
(f)
(g)
(h)
232
Kenya
5.
Default Agents
Where Default Insurance Programme (DIP) is in force, default agent(s) will be required
to provide a bank guarantee for a period of 2 years from the date of reinstatement of
credit.
6.
New Applicants
Must have been in operation for 12 months as a travel agent before applying for IATA
approval.
New applicant must join the Default Insurance Programme subject to approval by the
Provider and also provide a bank guarantee for two years that will be based as
follows:
6.
(a)
Kenya: on average 6 weeks cash trading less paid up capital or USD 50,000 /
equivalent KES whichever is higher. Option will be fortnightly remittance for a
reduction of 40% of the guarantee.
(b)
Staff
The Agent must have in employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and
report these to the BSP.
233
Korea
KOREA
(Effective 1 June 2011 Mail Vote OA/E22)
1.
Finances
1.1
Applicants must:
(i)
be established and in business as a travel agent not less than six months prior
to the date of application, and
(ii)
(iii)
1.2
When assessing whether the applicant meets the financial standing described in
Subparagraph 1.1 of this paragraph the following shall be taken into account:
(i)
(ii)
(iii)
234
Kuwait
KUWAIT
(Effective 19 November 2010 = PAC/33)
NEW APPLICANTS
Finances
a. Financial Statements
b. Financial Security
c. Financial Review
Newly accredited agents will be subject to Financial review within Six months of the
approval date and/or the submission of the provisional Bank Guarantee, and
accordingly will be required to submit a revised Bank Guarantee that covers 5 weeks
of sales turnover subject to a minimum of KD 75,000/- per location.
EXISTING AGENTS
Finances
a. Financial Statements
Certified accounts, which are not more than 6 months old (i.e. balance sheet, profit &
loss account indicating a satisfactory financial standing), aged statement of accounts
receivable and payable, banks statement (s) of accounts for preceding three months,
auditors statement of preferential claims on assets and contingent liabilities.
For the avoidance of doubt, certified financial Statements must be submitted to IATA
irrespective of the type of Financial Security used.
b. Financial Securities
Qualifying agents may choose one of the following two methods of Financial Security:
235
Kuwait
1. Bank Guarantee
In case of new and/or existing agents with multi-locations (branches and/or implants),
the financial documents of the approved and operating HO should be submitted.
Consequently the financial security (BG) should cover the entire agency network.
Periodic and ad hoc reviews shall be conducted in accordance with the established
applicable Resolutions.
Resolution. 800f
236
Kuwait
Staff Criteria
The applicant must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and report
these to the BSP.
237
Ratio Tests used and maximum number of points obtainable per ratio test:
Ratio
Liquidity ratio
Points
14
Debt ratio
14
Turnover ratio
_________________
1
Ratio Tests Definition and Parameters: An acceptable financial ratio analysis measured by the
application of four ratio tests against which points are allocated. A maximum of 40 points may be
attained. To be considered acceptable, a minimum of 22 points shall be scored.
238
14 points
12 points
10 points
8 points
6 points
4 points
2 points
0 points
7 points
6 points
5 points
4 points
3 points
2 points
1 point
0 points
7 points
6 points
5 points
4 points
3 points
2 points
1 point
0 points
14 points
12 points
10 points
8 points
6 points
4 points
2 points
0 points
239
5 points
4 points
3 points
2 points
1 point
0 points
240
241
242
USD 35,000
USD 25,000
USD 18,000
Additional Requirement:
Guarantees shall be equivalent to the number of Days Sales at Risk or a minimum of USD
10,000.
Colombia
Minimum capital established in US dollars, but must reflect value in Colombian pesos, at the
official exchange rate when presenting the application. Minimum working capital for the
Home Office:
Bogota
Cali and Medellin:
In cities with more than 500,000 inhabitants:
In cities with less than 500,000 inhabitants:
USD 40,000
USD 30,000
USD 20,000
USD 15,000
The minimum working capital for each additional branch office will be one-third of the amount
required according to the value shown for the cities mentioned above. The capital quoted
must be the real and effective one paid to the agency by the shareholder.
Costa Rica
Recent audited balance sheet signed by accountant. Profit and Loss statement. Bank
statements for three months. Minimum social capital USD 30,000 Minimum working capital
USD 20,000.
Dominican Republic and Haiti
Certified, audited current balance sheet not more than 6 months old, notarized and signed by
a Certified Accountant. Bank and/or Credit report covering 3 months preceding the date of the
balance sheet. All agents/applicants will be required to submit a Profit and Loss statement.
Financial statements in US funds or equivalent must show a minimum of USD 25,000.00 in
working capital (active) minus current liabilities (passive), plus additional USD 7,500.00 for
each branch office.
243
244
245
Uruguay
Audited up-to-date balance sheet certified by chartered accountant whose signature must be
certified by the Professional Board, including a Profit and Loss Statement. Minimum tangible
net worth required of Approved Agents will be equivalent to the minimum amount shown per
sales volume bracket in the table below. The sales volume calculation is based on Agent's
own average of net cash sales for a period equivalent to the number of Days' Sales at Risk
(refer to Resolution 800f).
Days' Sales at Risk
More than USD 800,000
From USD 700,000 to USD 799,999
From USD 600,000 to USD 699,999
From USD 500,000 to USD 599,999
From USD 400,000 to USD 499,999
From USD 300,000 to USD 399,999
From USD 200,000 to USD 299,999
From USD 150,000 to USD 199,999
From USD 100,000 to USD 149,000
From USD 75,000 to USD 99,999
From USD 50,000 to USD 74,999
From USD 25,000 to USD 49,999
From USD 20,000 to USD 24,999
From USD 15,000 to USD 19,999
From USD 10,000 to USD 14,999
Up to USD 9,999
Venezuela
Each Agent shall file annually with the Agency Administrator, within 90 days of the end of the
Agent's fiscal year, a financial statement prepared in accordance with generally accepted
accounting principles for evaluation. The Agent's total paid-up capital shall be in accordance
with the following:
Caracas and Metropolitan Area:
Maracaibo and Valencia:
Rest of country:
Each Branch an additional:
USD 38,000
USD 30,000
USD 23,000
USD 11,000
Agents Home Office Locations situated in other than the cities listed and opening a Branch
Location in Caracas, must consolidate its paid-up capital to the equivalent of USD 38,000.
ALL COUNTRIES: FINANCIAL GUARANTEE REQUIREMENTS
New Applicants and/or Agents will be subject to the presentation of a financial guarantee as
described below:
New Applicants: Head Office and/or Branch Location are required to present a guarantee
for a period of two years in accordance with Resolution 800f. Amount of guarantee
246
Payment related Irregularity financial guarantee is required whenever Agent short pays
or fails to pay on remittance date.
Minor Error Rule An Agent shall be subject to two instances of irregularity following a
short payment and/or late payment (pursuant to Resolution 818g), however, the financial
criteria requirement to submit a financial guarantee will be waived once, in a twelve month
period, whenever the Agent demonstrates satisfactory evidence from the bank, that total
amount due was available in Agents bank account on the date of remittance and the
amount due was paid within the demand period.
Duration of guarantee:
One-year minimum for Approved Agents. Prior to the expiry of the guarantee Agents will
be requested to submit their financial statements for review.
Two-years for Applicants subject to satisfactory results of financial review prior to expiry of
the guarantee.
Amount of guarantee
Accredited Agents: Agent's average annual net cash sales of the previous 12 months
equivalent to the number of Days' Sales at Risk. The number of Days' Sales at Risk is to be
counted from the beginning of the reporting period to the remittance date in respect of that
reporting period plus a margin of five days. This criterion follows framework established by
Resolution 800f.
New applicants (Head Office and/or Branch Locations): Annual country net cash sales
volume of Agents in the BSP, minus sales of top 10% of Agents and bottom 20% of Agents to
determine the average net cash sales of remaining Agents, equivalent to the number of
Days' Sales at Risk. Certain country exceptions are listed below:
Argentina:
USD 30,000
Bahamas:
USD 65,000
Brazil:
BRL 18,000
Central America*:
*Belize, Costa Rica, El Salvador,
Guatemala, Honduras, Nicaragua and Panama
USD 50,000
Chile:
USD 20,000
Colombia:
Bogota
Cali and Medellin:
USD 40,000
USD 30,000
247
USD 20,000
USD 15,000
Eastern Caribbean*:
*Aruba, Antigua, Barbados,
Bonaire, Curacao, Dominica, Grenada,
Guyana, Montserrat, St. Kitts, St. Lucia,
St. Maarten, St. Vincent, Trinidad and Tobago
USD 25,000
Ecuador:
Quito & Guayaquil
Other cities
USD 30,000
USD 20,000
Paraguay:
USD 10,000
Peru:
USD 10,000
Uruguay:
USD 20,000
248
Latvia
LATVIA
(Effective 1 June 2010 PAC/32)
Finances
The financial standing of applicants and IATA Agents in Latvia is evaluated by a Financial
Assessor employed or appointed by the IATA Agency Services Office in Stockholm. Only
companies that are financially sound will be approved.
New applicants and IATA Accredited Agents are required to submit independently audited
Balance Sheet and Profit and Loss accounts indicating a satisfactory financial standing.
Financial statements must show a positive balance of current assets over current liabilities.
Documents must be produced by a nationally approved Public Auditor in accordance with
International Accounting Standards and be translated to English and should not be older than
6 months. IATA reserves the right to require the annual report including Profit and Balance
sheet in original.
New applicants submitting an insolvent Balance Sheet will be disapproved.
New applicants must submit a minimum bank guarantee or Insurance letter of LVL 25,000
based on 4 times monthly payments. Bank guarantee and 4 times monthly payments should
be in place for a minimum of 2 years until the volume of sales through IATA Members has
been established. All IATA Accredited Agents must submit a Bank guarantee or Insurance
letter of 6% or a maximum of LVL 150,000, based on their calculated or actual annual sales
processed through the BSP, based on twice monthly payments, or 3% or a maximum of LVL
75,000 if based on 4 times monthly payments..
All IATA Accredited Agents will continuously be reviewed in relation to the IATA sales
statistics based on their previous 12 month of net cash sales to adjust the amount of the Bank
guarantee or Insurance letter. When an IATA Accredited Agent fulfills all of the below three
(3) criterias; Profitability, Equity Capital and Solvency for a period of no less than three (3)
consecutive years of full trading as an IATA Accredited Agent, the Bank guarantee or
Insurance letter will be adjusted to 6% or a maximum of LVL 135,000, based on their previous
12 month of net cash sales processed through the BSP for all their approved locations,
calculated on twice monthly payments.
1. Profitability
An Agent is required to show profit before tax at the end of the trading period.
2. Equity Capital
Rate of solidity =
3. Solvency
Rate of liquidity =
249
Latvia
250
Lebanon
LEBANON
(Effective 1 January 2009)
Financial Securities
One of the following two methods of Financial Securities is required from all IATA Accredited
Agencies in Lebanon:
a.
Bank Guarantee BG
a.
The minimum BG level in any case and all the time will be USD 100,000 (One
Hundred Thousand USD)
b.
New applicants with out prior sales records will submit the minimum BG level of USD
100,000. This minimum BG level could be increased on case-by-case basis, should it
be deemed necessary, and based on the risk assessment.
c.
The BG level of each accredited agency will be adjusted on annual basis, based on
the following criteria:
1.
The annual BG adjustment calculation will be: (Total sales amount APR-SEP / 180
calendar days) times 35 days
2.
The adjustment level required from each agency will be communicated by email to
each agency, in OCT every year, with a deadline to comply by no later than close of
business on JAN 02nd of the new year, or the next working day, should the given
deadline fall into a public holiday.
3.
4.
Newly accredited agencies with sales record partially reflecting the APR-SEP period,
but with minimum 35 days sales record between in APR-SEP period, will be required
to amend the BG by: (total sales amount recorded between APR-SEP / number of
days with recorded sales between APR-SEP) times 35 days
b.
All new applicants upon application submission, and all Accredited Agencies
upon the annual Financial Assessment submission, must submit the following
financial statements:
1. Statement of Assets and Liabilities
2. Net Income
3. Stockholders Equity
251
Lebanon
An applicant with less than one years trading will have to submit the following
financial statements:
1. Opening Balance Sheet
2. Statement of Accounts receivable and payable
3. Copy of bankers Statement of Accounts for the preceding three (3)
months, together with a Reconciliation Statement confirmation of, if any,
preferential claims on assets and the existence of contingency liabilities
4. Confirmation that the bank account, through which all transactions will be
made, is not in any other name but the applicants legal or trading name
5. Any additional statements and documents required by the Financial
Assessor or IATA Country Manager
c.
d.
e.
Meeting the minimum requirements of the Financial Criteria does not mean
eliminating the need to have additional financial securities, whenever deemed
necessary.
f.
All Financial Statements and documents not to be older than 6 months upon
the date of submission, and in English language, and duly certified, stamped,
and signed by a chartered certified public accountant from a well-established
and known Accounting Firm.
Staff Requirements
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
Automation
New Applicants must submit proof of having an automated ticketing device, provided by a
certified ticketing system provider, in place.
License
License to trade as a travel agency issued by the Ministry of Tourism is required.
252
Lithuania
LITHUANIA
(Effective 1 June 2010 PAC/32)
Finances
The financial standing of applicants and IATA Agents in Lithuania is evaluated by a Financial
Assessor employed or appointed by the IATA Agency Services Office in Stockholm. Only
companies that are financially sound will be approved.
New applicants and IATA Accredited Agents are required to submit independently audited
Balance Sheet and Profit and Loss accounts indicating a satisfactory financial standing.
Financial statements must show a positive balance of current assets over current liabilities.
Documents must be produced by a nationally approved Public Auditor in accordance with
International Accounting Standards and be translated into English and should not be older
than 6 months. IATA reserves the right to require the annual report including Profit and
Balance sheet in original.
New applicants submitting an insolvent Balance Sheet will be disapproved.
New applicants must submit a Bank guarantee or Insurance letter of minimum LTL 100,000
for a period of 3 years until the volume of sales through IATA Members has been established.
New applicants also need to remit 4 times monthly during the first three years in the BSP.
All IATA Accredited Agents must submit a Bank guarantee or Insurance of 9% or a maximum
of LTL 800,000 based on their calculated or actual annual sales processed through the BSP
on all their approved locations, based on twice-monthly payments, or 5% or a maximum of
LTL 400,000 based on 4 times monthly remittance. If an Agent voluntarily wants to remit 4
times monthly it should be for a minimum period of one year. An Agent that is reinstated from
a default status needs to remit 4 times monthly for a period of 3 years, with bank guarantee
set to 5% or maximum of LTL 400,000.
All IATA Accredited Agents will continuously be reviewed in relation to the IATA sales
statistics based on their previous 12 month of net cash sales to adjust the amount of the Bank
guarantee or Insurance. When an IATA Accredited Agent fulfills all of the below three (3)
criteria; Profitability, Equity Capital and Solvency for a period of no less than three (3)
consecutive years of full trading as an IATA Accredited Agent, the Bank guarantee or
Insurance will be adjusted to 6% or a maximum of LTL 800,000, based on their previous 12
month of net cash sales processed through the BSP on all their approved locations,
calculated on twice monthly payments, or 3% or a maximum of LTL 400,000 based on 4 times
monthly remittance.
1. Profitability
An Agent is required to show profit before tax at the end of the trading period.
2. Equity Capital
Rate of solidity = Equity capital = min 6%
Total capital
253
Lithuania
3. Solvency
Rate of liquidity =_
Bank guarantees or Insurances should be without expiry date and drafted in accordance with
guidelines provided by IATA using an English standard text. Bank guarantees or Insurances
will be accepted only if issued by a Bank or Insurance Company approved by IATA. If the
Bank guarantee or Insurance holds an expiry date it is the Agents responsibility to renew such
Bank Guarantee or Insurance and submit the same to the IATA Agency Services Office no
later than 30 days before such expiration. Failure to meet such requirement will be dealt with
in accordance with the Passenger Sales Agency Rules.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location. Additional copies if needed can be requested through your local BSP contact.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
License
Governmental certificate to trade as a Travel Agency.
254
Finances
1.1
New Applicants
Applicants must:
(a) be established and in business as a travel agent for not less than two years from the date
of licensing prior to the date of application, and
(b) have as a minimum paid-up capital of MOP 1 million;
(c) submit a certified complete set of audited financial statements which must not be older
than 9 months at the time of assessment and in the auditors opinion, the financial
statements give an unqualified true and fair view of the state of the companys affairs.
Accredited Agents
Accredited Agents must submit annually a certified complete set of audited financial
statements which must not be older than 9 months at the time of assessment and in the
auditors opinion the financial statements give an unqualified true and fair view of the state of
the companys affairs.
When assessing whether the applicant or Agent meets the financial standing the following
shall be taken into account using the criteria set out in section 1.3:
(a) availability of adequate liquid funds to meet normal trading commitments,
(b) capital required to be commensurate with fixed assets,
(c) the existence of preferential claims on the assets and the existence of contingent
liabilities.
If Agents are unable to submit their audited financial statements within 6 months, their
auditors must write to IATA to state the reasons for the delay and to advise submission dates
on which the Agent will provide the audited financial statements but the date must not exceed
9 months.
1.2 Definitions
a. Encumbrance
Encumbrance means any asset of the applicant or Agent which has been pledged to any
person for the security of any arrangement granted by any person for the benefit of any
person other than the applicant or Agent.
255
b. Related party
A related party means any shareholder or director and their immediate families, trustees or
partners, associated and subsidiary companies, holding companies and their associated and
subsidiary companies, or related company.
c. Intangible
Intangible includes goodwill, trademarks, royalty, deferred expenses, deferred cost of
advertising.
d. Contingent liability
Contingent liability does not include bank guarantee provided for trade creditors of the
applicant or Agent.
e. Tangible net worth
Tangible net worth is the aggregate amount of:-paid-up share capital;
-reserves;
-professional property revaluation reserves; and
-retained profits;
minus
-retained losses;
-intangibles;
-encumbrances;
-deferred tax assets;
-contingent liabilities; and
-net amount of loans to related parties.
256
Score
Tangible Net Worth
MOP 1 million or 150% of the amount of net loss after tax, whichever 80
is higher
< MOP 1 million
0
Test 2 Working Capital Ratio
Working Capital Ratio =
Score
10
5
0
Score
10
5
0
Where the applicants or Agents overall score is below 85 and it does not have any
Tangible Net Worth deficiency:
In the form of injection of paid-up capital and/or bank guarantee/insurance bond
Where the applicants or Agents overall score is below 85 and its annual turnover is
below MOP 20 million:
In the form of injection of paid-up capital and/or bank guarantee/insurance bondif the
difference between the Tangible Net Worth and the minimum requirement is below MOP
1 million
257
In the form of bank guarantee/insurance bond, if the difference between the Tangible Net
Worth and the minimum requirement is MOP 1 million or above
Where the applicants or Agents overall score is below 85 and its annual turnover is MOP
20 million or above:
In the form of injection of paid-up capital and/or bank guarantee/insurance bondif the
difference between the Tangible Net Worth and the minimum requirement is below MOP
3 million
In the form of bank guarantee/insurance bond, if the difference between the Tangible Net
Worth and the minimum requirement is MOP 3 million or above
Total
Score
=>85
<85
Annual
Turnover
N/A
N/A
<85
<85
<85
<85
c. Unsatisfactory
Where the applicants or Agent's financial standing has not been found satisfactory without
condition and request to provide additional financial support has not been complied with on or
before the deadline.
1.5
For applicants and Agents, the amount of bank guarantee/insurance bond required is
equivalent to the applicants average 33-day BSP cash turnover based on the previous 6
months. Minimum bank guarantee/insurance bond amount is MOP 50,000.
2. Licence
The applicant or Agent must be in possession of a valid licence from the Macau Government
Tourist Office to operate as a travel agent.
258
Malawi
MALAWI
FINANCIAL CRITERIA
(a)
An Agent applying for IATA accreditation must have been in operation as a Travel
Agency for a minimum of 6 consecutive months.
(b)
New applicants for IATA approval must submit an audited Balance Sheet and Profit
And Loss Statement, duly certified by an external public accountant/auditor for the
most recent financial year end/period.
(c)
A minimum entry-level bank guarantee amount will be USD 18,000.00, based on the
IATA exchange rate. Guarantees are to be standard IATA legal format, along with a
standard written notice period of 3 months. Newly approved Agents will be reevaluated on a quarterly basis for one year and the amount of the guarantee will be
based on average sales levels. There will be a financial review should a major change
in the financial stability/ownership of the agency occur. Bank guarantees will also be
re-evaluated if the $:MWK exchange rate declines more than 20%.
(d)
Accredited Agents are obliged to submit a copy of their report and audited accounts
within 6 months of the end of the financial year. All Agencies will be reassessed every
year, in order to determine their financial stability. In the case of private or individually
owned organizations (not LTD) a certified statement of the owner's capital assets must
be added. An Agent with a Qualified Audit Report will be put on immediate cash basis.
Solvency
Profitability
Agents must operate their business with the intention making a profit.
Guarantee Evaluation
Following the submission of the initial guarantee, subsequent annual reviews and settings of
the guarantee levels will be calculated as follows:
Average 4 weeks cash sales are to be covered in full based on the most recent 12
month sales.
IATA/BSP will have the right to request for additional guarantee if the average sales during a
period of any 4 months exceed the annual sales average by 50%.
The guarantees must be obtained from acceptable financial institutions as approved by IATA
All guarantees must be from local banks/ institutions.
259
Malawi
Reduction of Guarantee
To qualify for any reduction in the guarantee amount the agent must comply with the
following:
0%
47
10%
8-10
20%
10+
30%
STAFF CRITERIA
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
260
Malaysia
MALAYSIA
(Effective December 2010 OA/29)
1.
Finances
1.1
The applicant must provide a certified and audited balance sheet and Profit and Loss
not more than twelve months old.
1.2
Applicants must:
(a)
(b)
(c)
(i)
(ii)
provided further that such financial guarantee shall not be less than
MYR 60,000 in all areas for Bumiputra applicants holding a letter of
appointment from the Ministry of Finance;
(iii)
for the purpose of this Paragraph Kuala Lumpur includes Petaling Jaya, Shah
Alam and Klang;
1.3
When assessing whether the applicant meets the financial standing described in
Subparagraph 1.1 of this paragraph the following shall be taken into account:
1..3(a)(i)
Liquidity Ratio
Value
Current
Assets/ 1.00 and above
Current Liabilities
0.80 to 0.99
0.70 to 0.79
0.69 to 0.49
0.48 and below
Points
20
10
5
2
0
Efficiency Ratio
Value
(Receivables/Sales) x 60 days or less
365
61 to 120 days
121 to 150 days
151 days and above
Points
30
15
5
0
261
Malaysia
Gearing Ratio
Total Liabilities/ Total
Equity
Profitability Ratio
Net Income (after tax) /
Total Revenue
Value
Points
2.00 or less
15
2.01 to 3.00
3.01 to 4.00
4.01 and above
10
5
0
Value
0.050 and
above
0.000 to 0.049
Below 0.000
Points
5
3
0
Payment History
No. of Irregularities
in the last 2 years
Quick Ratio
Quick Asset /
Current Asset
Value
Points
0 or 1
20
2
3 and above
15
0
Value
Points
10
5
2
1
0
1.3(a)(ii) the minimum passing score for annual financial review on audited statement dated
year 2010 shall be at 40 points and 50 points for the subsequent years.
1.3(a)(iii) If an agent fails the annual financial review, agent may be accepted if the paid-up
capital of the company is increased to show a positive net worth. The agent must forward the
relevant document to the Agency Administrator as evidence.
An agent may also be accepted if the financial guarantee is increased as per below tiers:
Tier 1:
Tier 2:
2. Premises
The location for which application is made must be open for business on a regular basis and
freely accessible to the general public for the sale of international air transportation during
normal business hours.
3. Licence
The applicant must be in possession of a valid licence as a Ticketing Agent issued by the
relevant authorities. A copy of the KKKP/KPL (Ministry of Tourism) Licence must be provided
and certified correct by a Commissioner of Oath or Public Notary.
262
Malta
MALTA
New applicants
(a) An Agent must be fully automated.
Finances
A full set of audited accounts must be presented for the most recent financial year. Accredited
Agents are obliged to submit a Balance Sheet and Profit and Loss account (duly certified by
an outside certified public accountant and auditor) within 6 months of the end of their financial
year. All financial statements should be prepared in accordance with the requirements of the
International Accounting Standards and the Companies Act 1995.
Companies with less than one year's trading record must submit a copy of a certified opening
Balance Sheet. Where an applicant is the subsidiary of a larger parent organisation, then a
copy of the audited accounts for the parent organisation must also be submitted.
The criterion assumes that the tour wholesaling or other business are not part of the same
legal entity as the retail business. Turnover is defined as IATA scheduled gross turnover,
excluding credit card sales.
An Agent is required to show profit before tax at the end of the trading period. The profit
criteria relates to the core business.
An Agent is required to show that current assets exceed current liabilities at the end of a
trading period. In the event that current liabilities exceed current assets the level and quality
of an Agent's fixed assets may be taken into consideration. Where applicants are wholly
owned subsidiaries, parent company guarantees may be sought if necessary.
Should an accredited Agent, following a financial review, not meet any one of the criteria
itemised above, then a bank guarantee to a level of 16% of his last twelve months actual
turnover will be applied.
Should a new applicant not meet any one of the criteria above, a minimum bank guarantee of
either MTL 5,000 or the equivalent of 16% of their forecast turnover, whichever is the highest,
will be required. Applicants meeting all the above criteria need not provide a bank guarantee.
Applicants submitting an insolvent Balance Sheet will be disapproved.
Additional information or confirmations may be sought on freehold and leasehold properties,
loan capital and other balances which are significant in relation to the accounts.
License
(a) A valid license, issued by the Malta Tourism Authority in accordance with the Malta Travel
and Tourism Services Act 1999, Chapter 409 is required.
(b) A copy of the license is required by a new applicant and proof of its renewal to be
presented annually thereafter.
__________________________________________________________________________
263
Mauritius
MAURITIUS
(Effective 1 January 2011 PAC/33)
1.
Financial Criteria
Audited annual financial statements duly certified by a Certified Public Accountant
must be produced annually and submitted to the ASO-JNB. The documents shall not
be older than 6 months from financial end year date.
A bank guarantee, which has to be provided, must be irrevocable and must be written
as per the IATA specimen. The validity of the guarantee shall not be less than one
year from the date of issue. Bank Guarantee must be renewed at least one month
prior to expiry date.
2.
New Application
New applicants must have been in operations for one year and are required to submit:
If the forecasted average monthly BSP sale is higher than MUR 1,800,000, a higher
bank guarantee equivalent to the forecasted average monthly sales shall be
submitted.
If BSP sales figure exceeds the bank guarantee amount by more than 30 % over 4
consecutive months, the agent shall be requested to submit a new bank guarantee
equivalent to the average of the past 4 months sales.
Bank guarantee should be written as per the IATA Specimen and should be valid at
least 1 year from the date of issue.
Equity: The owner's equity (capital paid-in, reserves, profit or loss carried forward)
should not be lower than equivalent of 10,000 USD. If this requirement is not met a
new applicant may not be accredited.
Current Ratio: Current ratio (current assets over current liabilities) should not be lower
than 1.
Debt Ratio: Debt ratio (long-term and short-term liabilities over owner's equity) should
not be more than 2.5.
Operation Profit: Profit and Loss Account must show an operating profit.
264
Mauritius
Established Agents
Agents are required to submit:
Equity: The owner's equity (capital paid-in, reserves, profit or loss carried forward)
should not be lower than equivalent of 10,000 USD. If this requirement is not met an
established Agent may not be retained.
4.
Bank Guarantee
Following the submission of the initial bank guarantee, subsequent annual reviews
and setting of the guarantee level will be calculated as follows:
Bank Guarantee will be based on average one-month BSP Net Cash sales less
applicable deductions as depicted below.
5.
Reduction of Guarantee
To qualify for a reduction in the guarantee amount as set out above the agency is to
meet the following criteria:
(a)
The agent must have been in business for more than 3 years;
(b)
(c)
(d)
The agency has not been placed in default in the preceding 3 years of trading;
(e)
Reduction in the bank guarantee based on the above requirements and the
number of consecutive years in business as BSP agent shall be as follows:
265
Mauritius
(f)
No. of years
% Reduction
0-3
4-6
7-10
11-15
16-20
21+
nil
5%
10%
20%
30%
50%
The bank guarantee shall be reviewed by IATA if an actual monthly BSP sale
exceeds the bank guarantee amount by 30 % over 4 consecutive months.
The required bank guarantee shall be submitted within 45 days from the date
of the review letter.
6.
Staff
The Agent must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and
report these to the BSP.
7.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting
and settlement rules is contained in the BSP Manual for Agents supplied to each
Approved Location. Additional copies can be requested through your local BSP
contact.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake
such training is encouraged to contact the local BSP office.
8.
Automation
Agents must have an automated ticketing system and facilities to download billing
electronically.
266
Mongolia
MONGOLIA
(Effective 1 October 2011 Mail Vote A205)
1 Finances
1.1 the applicant must provide accredited accounts showing satisfactory financial standing
and ability to remain solvent and pay bills:
1.2(a) applicant must:
1.2(a)(i) be established and in business as a travel agent not less than six months prior to the
date of application, and
1.2(a)(ii) have as a minimum paid capital of USD 100,000 and
1.2(a)(ii) a bank guarantee equivalent to average 17 days sales turnover of the month of the
total passenger sales on behalf of the BSP Mongolia participating airlines but not less than
minimum USD 200,000 whichever is higher,
1.3(a) when assessing whether the applicant meets the financial standing described in
Subparagraph 1.1 of this Paragraph the following shall be taken into account:
1.3(a)(i) availability of adequate liquid funds to meet normal trading commitments,
1.3(a)(ii) capital required to be commensurate with fixed assets,
1.3(a)(iii) the existence of preferential claims on the assets and the existence of contingent
liabilities,
1.3 the Agency Services manager shall conduct periodic examinations of the financial
standing of Agents. He may request and the Agent concerned shall be under obligation to
furnish, by the date specified in the Agency Services managers letter of request, the
documents deemed necessary by the Agency Services Manager to conduct such
examination. Failure by the Agent to submit such documents as prescribed shall be grounds
for the Agency Services Manager to request the Agency Administrator to place the Agent on a
Cash Basis and give the Agent notice of termination of the Sales Agency Agreement,
provided the if the Agent demonstrates to the Agency Administrator prior to the termination
date that it meets the financial criteria incorporated in the Travel Agencys Handbook the
termination shall not take effect,
1.4 when the financial position of an Agent is subject to examination by the Agency
Administrator, and the Agent is unable to meet the financial criteria of Travel Agents
Handbook, the Agency Administrator shall take normal business fluctuations into account and
provide the Agent with a reasonable period of time to meet those criteria.
267
Morocco
MOROCCO
Finances
The applicant/Agent must provide current financial statements, including balance sheet, profit
and loss account and attachments, certified by a public accountant or auditor.
Solvability
Liquidity
Ratio short-term assets (available assets and short-term creditors) compared to shortterm liabilities must be equal to 1.
A ratio of 0.75 will be acceptable provided a guarantee is provided.
Any guarantee will be calculated on the average of the last 6 months sales.
Guarantee
A bank guarantee of 300,000 MAD will be required during the first two years of participation in
BSP for any new accreditation. During this period the bank guarantee will be updated to
maintain a guarantee coverage of two months of sales equivalent.
Staff
The agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
Automation
It is mandatory for all Agents to be automated.
License
A permanent license to trade as a travel agency issued by the Ministry of Tourism is required.
268
Mozambique
MOZAMBIQUE
FINANCIAL CRITERIA
(a)
An Agent applying for IATA accreditation must have been in operation as a Travel
Agency for a minimum of 12 consecutive months.
(b)
New applicants for IATA approval must submit an audited Balance Sheet and Profit
And Loss Statement, duly certified by an external public accountant/auditor and must
not be older than 6 months. Approval from the CAA to operate a travel agency must
also be submitted.
(c)
A minimum entry-level bank guarantee amount will be USD 90, 000.00, based on the
IATA exchange rate. Guarantees are to be standard IATA legal format, along with a
standard written notice period of 12 months. It is the responsibility of the agent to
ensure that guarantees are renewed at least one month before the expiration of the
current guarantee.
(d)
Newly approved Agents will be re-evaluated on a quarterly basis for a period of one
year and the amount of the guarantee will be based on the average sales levels over
the last quarter. There will be a financial review should a major change in the financial
stability/ownership of the agency occur. Bank guarantees will also be re-evaluated if
the MZM exchange rate declines more than 30%.
(e)
Any agent overtrading by 20% for three consecutive months will also be subject to an
immediate review.
(f)
Accredited Agents are obliged to submit a copy of their report and audited accounts
within 5 months of the end of the financial year. All Agencies will be reassessed every
year, in order to determine their financial stability. In the case of private or individually
owned organizations (not LTD) a certified statement of the owner's capital assets must
be added. An Agent with a Qualified Audit Report will be put on immediate cash basis.
SOLVENCY
PROFITABILITY
Agents must operate their business with the intention of making a profit.
269
Mozambique
GUARANTEE EVALUATION
With the exception of new agents all agents will be reviewed on an annually and the bank
guarantee levels will be calculated as follows:
Average 4 weeks cash sales are to be covered in full based on the most recent 12 month
sales.
IATA/BSP will have the right to request for additional guarantee if the average sales during a
period of any 3 months exceed the annual sales average by 20%.
The guarantees must be obtained from acceptable financial institutions as approved by IATA
All guarantees must be from local banks / institutions.
REDUCTION OF GUARANTEE
To qualify for any reduction in the guarantees the agent must comply with the following:
% Reduction
0-5
Nil
6-10
11-15
15+
10%
25%
30%
Staff
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location. Additional copies can be requested through your local BSP contact.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
270
Nepal
NEPAL
(Effective 1 January 2010 PAC/32)
Before completing the Application form for approval as an IATA Passenger Sales Agent, the
applicant must be established and in business as a Travel Agent of international ticketing for
not less than 12 months prior to the date of application.
Administrative Requirements
All new and existing agents are required to be fully automated and must have in place the
following:
-
Internet connectivity
A UPS or other source of power backup
Staff Criteria
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
FINANCIAL EVALUATION
General
The Applicant / Agent shall provide latest audited financial statements prepared in
accordance with standard accounting practices. Financial statements shall be in the form of a
Balance Sheet and Profit and Loss Account with attachments and cover the latest fiscal year.
A. PREPARATION
1)
2)
Change of Ownership
If the business is continuing, the applicant must submit the latest year ending
statements of audited accounts reflecting the position of the Agency in operation and a
certified opening balance sheet reflecting the position of the new entity on
commencing business.
271
Nepal
B. FINANCIAL STATEMENTS
1)
Minimum Capital
i)
Minimum paid up share capital for both Applicant and existing Agent in NPR 100,000/-
ii)
SHARE CAPITAL
(NPR)
100,000
120,000
140,000
160,000
180,000
200,000
Applicants who may not meet the above criteria shall be given a period of 1 month in
which to meet the minimum requirement.
Approved agents who may not meet the above criteria shall be given a period of 6
months in which to meet the minimum requirement.
2)
Financial Assessment
Based on 5 tests and the allocation of applicable points each test, maximum points
are 30 and a total of 15 points or more is considered satisfactory providing the
Applicant maintains the minimum level of share capital/owners capital.
The maximum number of points obtainable is made up as follows:
(i)
(ii)
(iii)
(iv)
(v)
(i)
2 points
8 points
8 points
4 points
8 points
TOTAL
30 points
(ii)
Current Ratio
Current Assets divided by Current Liabilities
Current Assets exclude receivables from Shareholders
Current Liabilities exclude loans provided by Shareholders or proprietor/ partner
272
Nepal
Over 1.50
1.25 1.49
1.00 1.24
0.95 0.99
0.90 0.94
0.85 0.89
0.80 0.84
0.75 0.79
Under 0.75
(iii)
8 points
7 points
6 points
5 points
4 points
3 points
2 points
1 points
0 point
Debt Ratio
Total Debt divided by Tangible Assets
Total Debt includes Current Liabilities and all loans from 3rd parties
Tangible Assets are Total Assets at market value (including receivables from
shareholders) less intangible assets such as goodwill, franchise fees, client lists and
preliminary expenses. Goodwill attaching to premises will be classed as intangible
unless supported by a written valuation from an independent registered valuer.
Under 0.5
0.50 0.59
0.60 0.69
0.70 0.79
0.80 0.89
0.90 0.99
1.00 1.19
1.20 1.29
Over 1.29
(iv)
8 points
7 points
6 points
5 points
4 points
3 points
2 points
1 points
0 point
Profitability Ratio
Net Profit before Tax x 100
Shareholders Funds
1
Net profit before tax is profit before tax and before extra-ordinary items.
Shareholders funds. This is the paid up share capital/owners capital plus retained
earnings (minus deficit) plus other recourses.
Over 19.99%
15% - 19.99%
10% - 14.99%
0% - 09.99%
Under 0
4 points
3 points
2 points
1 points
0 point
273
Nepal
(v)
3)
4)
Solutions
Applicants, who unable to meet the financial criteria shall be given in writing full details
and reasons of how and why they have failed to meet the financial criteria, They would
further be given minimum of 1 month after receipt of review to meet the criteria. Failing
to do so, the application would be rejected.
Accredited Agents who are unable to meet the financial criteria shall be given in
writing full details and reasons of how and why they have failed to meet the financial
criteria. Such Agents shall be given a minimum of 6 months after receipt of the review
findings to meet the laid down criteria.
If the agent is unable to meet the laid down criteria by using the stated options within 6
months, action in accordance with Section 2.2.2 of Resolution 818g will be initiated.
5)
Financial Review
A review of all approved Agents should be carried out on a yearly basis.
274
Nepal
275
Netherlands
NETHERLANDS
(Effective 19 November 2010 PAC/33)
Finances
y
y
y
Latest Balance Sheet and Profit and Loss Account not older than 3 months
Completed questionnaire for financial assessment
Indexes used in the financial evaluation:
Norm
Solvency
20
= _________Operating____
Capital (Equity + Reserves)
10
276
New Zealand
NEW ZEALAND
FINANCIAL EVALUATION
The term applicant where used in these Criteria shall be understood to include an
Accredited Agent.
The applicant shall provide confirmation that they are Members of the Travel Agents'
Association of New Zealand (TAANZ), or alternatively provide financial statements prepared
by a Chartered Accountant in accordance with standard accounting practice and signed by
one director or the proprietor(s). Such statements shall be evaluated pursuant to the financial
standards established from time to time by the General Assembly and set forth in the
Handbook.
Change of Ownership/New Applications
If the business is continuing, a new applicant must submit Statements reflecting the position
of the agency in operation. Historical data will thus be available for evaluation. Otherwise an
applicant shall submit a certified opening balance sheet reflecting the position of the new
entity on commencing business. Budgets of projected turnover and expenses will be required.
Newly Accredited Agents
Newly Accredited Agents will be so classified for a minimum period of 18 months following
Accreditation. At least 2 annual reviews must be conducted during the minimum period, e.g.
Accreditation in August 2002 with annual balance date of 31 March. Newly Accredited criteria
applies for reviews based on annual reviews to 31 March 2003 and 2004.
The new Agent status applies if the company or entity is applying for Accreditation, however
applicants can apply for exemption from this requirement on the following grounds:
(a)
The new applicant is a company or entity resulting from the merger or reconstruction
or sale and purchase of established businesses, and
(b)
(c)
The applicant is, in the opinion of the IATA Financial Assessor, adequately capitalized.
New Agents are required to provide interim financial statements covering the first 6 months of
each financial year. This requirement will not apply in the first period of Accreditation if the
interim reporting period would be less than three months.
The interim financial statements may be in the form of internally generated management
reports but must incorporate a statement of financial position as well as operating results.
The interim reports must be accompanied by a directors/proprietors declaration that the
company is solvent and is properly accounting for clients and principal funds.
277
New Zealand
1.
2.
(b)
(c)
(d)
278
New Zealand
(e)
Amounts due to clients and airlines and from clients and airlines must be
separately disclosed and must not be offset unless a legal right of offset exists
i.e. amounts due to one client or airline must not be offset against amounts due
from other clients or airlines.
3.
(g)
State whether bank overdraft or loan facilities are secured and details of
securities.
(h)
Disclose the nature of any encumbrances. For example if the assets of the
applicant are used as security for third parties.
(i)
CAPITAL ADEQUACY
A minimum shareholders' equity of $40,000 will be required but in many cases a larger
amount will be required to cover goodwill, fixed assets and working capital.
Shareholder, parent and associated company debit balances (other than in the
general course of the travel business) will be deducted in assessing shareholders
funds. They will be treated like a distribution to shareholders.
4.
The only funds which can be drawn from a travel funds account are:
(a)
(b)
279
New Zealand
(c)
(d)
In essence this requirement means that an Agent must maintain one bank account for
client travel funds. Another bank account is required for the payment of operating
expenses, including shareholder drawings in anticipation of salary.
The Civil Aviation (Passenger Agents' Commission Regime) Notice 1983, together
with the Passenger Sales Agency Agreement, provide that all monies received by an
agent in relation to the sale of international travel by air shall be kept in a separate
bank account on behalf of the principal until it is accounted for to the principal by the
agent. These requirements extend that requirement to funds received from consumers
on behalf of all principals.
Directors or proprietors will be required to provide an annual declaration of compliance
with the above procedures. In addition IATA can require evidence that the appropriate
level of funds are held in properly designated bank accounts.
5.
REMITTANCE PERIOD
New Agents will be required to remit on a 7 Day BSP Remitting frequency until at least
2 annual reviews have been conducted. All other Agents will have the option of 7 or
14 day BSP remitting frequency.
6.
DEFAULT PROTECTION
Every applicant will either:
If it is a member of TAANZ participate in a collective bond that has been agreed to by
the Airlines and is administered by TAANZ pursuant to the TAANZ/Airline Agreement
and/or Wholesale/Airline Agreements as applicable during the currency of such
Agreement, or
If it is not a member of TAANZ, provide and maintain for the protection of airline
principals (The Airlines) and the applicant's own customers as follows:
1.
2.
(For new applicants the gross sales for the first year shall be estimated).
280
New Zealand
Start with the annual gross travel business turnover of the Agent, i.e. the gross
value of the goods and services billed as retailer, consolidator, or wholesaler.
(Directors will be required to provide an annual declaration of this turnover).
2.
Deduct the gross value of airline services for which payment was made direct
to an airline or through BSP by way of the recognized credit card. This gives
turnover for Guarantee purposes.
3.
Upon request, Agents must provide the IATA Financial Assessor with any other
information within the timeframe stipulated that may be required.
7.
8.
(a)
Bank account balances and the distribution between client/airline funds and
the Agent's funds.
(b)
(c)
(d)
That all major creditors at balance date have been properly brought into
account.
(e)
That client deposits/prepayments have throughout the year been paid into a
designated travel fund and year-end balances are properly accounted for).
FINANCIAL DISCRETION
It is recognized that different interpretations of financial accounts are possible and do
occur. Accordingly the Financial Assessor shall have discretion as to the most
appropriate classification in accordance with standard accounting practices for all
items included in Financial Statements.
281
Nigeria
NIGERIA
(Effective 1 November 2009 PAC/32)
License
The Agency must be licensed by Government as a limited liability company.
Share Capital
Minimum paid up share capital of 30m Naira for new applicants effective 1st September 2009.
FINANCES
1.
Financial Statement
Audited financial statements duly certified by a certified public accountant disclosing
airlines sales and aged debtors must be produced by a new agent for the purpose of
accreditation and by existing agents been subjected to a financial review as a result of
default.
Should the audited accounts indicate that the default Agent is insolvent, IATA shall
immediately invoke procedures for the removal of the Agent from the Agency List.
2.
Financial Review
An Agent can be placed under Financial Review if:
i.
ii.
3.
Financial Security
The financial security shall be insurance by way of a Default Insurance Programme
and shall be issued by the following only:
All Insurance policies must be drawn as per the IATA Model document form.
An Agency has an option to request for a top up insurance from Provider to cover the
difference between the maximum individual sum insured covered by the Provider that
Agencys sales exceed the sum insured.
282
Nigeria
In the interim, until full implementation of the Default Insurance Programme, the
financial security shall be bank guarantee issued by a local bank established in
accordance with local banking regulations.
All bank guarantees must be drawn as per the IATA guarantee specimen.
The Bank Guarantee so required shall be a minimum value of Ten million Naira
(NGN10 million) from the Head Office of the issuing Bank.
All Agencies currently on BSP and Agencies that want to be on the BSP before 31st
August, 2009 are required to provide a bank guarantee of N10M by 31st August 2009.
All other Agents must be on the BSP by 1st November 2009 the using Default
Insurance Programme as the form of security.
For the avoidance of doubt, all IATA accredited agents shall be on BSP using DIP as
the form of security by 1st November 2009.
4.
New Applicant
All new applicants must have been in operation for not less than 6 months as a travel
Agent before applying for IATA accreditation and must comply with the following:
i.
ii.
iii.
5.
6.
BSP Procedures
Information on the procedures and responsibilities of Agents in respect of the reporting
and settlement rules is contained in the BSP Manual for agents supplied to each
Approval location.
IATA offers regular BSP procedures training sessions. Any Agent wishing to
undertake such training is encouraged to contact the local BSP office.
283
Pakistan
PAKISTAN
(Effective December 2010, approved OA/29)
1. Finances
1.1 Applicant must have:
1.1(a) conducted travel agent business for at least twelve (12) months having a Government
Licence issued by the Department of Tourist Services, Ministry of Tourism, Government of
Pakistan.
1.1(b) minimum paid-up Capital/Investment of PKR 4 million. The minimum paid-up
Capital/Investment criteria will be applicable to existing IATA approved agents from 01 April
2008 and for new IATA applicants from 01 April 2007.
1.1(c) minimum Bank Guarantee or Insurance Bond of PKR 7 million or equal to 35 days
average turnover, whichever will be higher. The Bank Guarantee has to be issued by a bank,
from the approved list, with an investment status rating from the Pakistan Credit Rating
Agency (PACRA) or JCR-VIS of A+/- or any other local or international rating approved by the
State Bank of Pakistan (SBP). For Financial Security Providers, the financial strength rating
(FSR) should be B+ or better from A.M. Best or the equivalent rating from another recognized
rating agency unless the Provider has reinsurance complying with these criteria. The
minimum Bank Guarantee or Insurance Bond will be applicable to new and existing IATA
Approved Agents.
284
Before completing the Application Form for approval as an IATA Passenger Sales Agent,
application must comply with the following:
Be established and in business as a Travel Agent for not less than 12 months prior to
the date of application.
At the time of application, the applicant must at the location for which IATA approval is being
sought satisfy the following:
1)
Be regularly open for business, clearly identified as a travel agency and accessible to
the general public. Conduct air travel separately from other business(es) occupying
the same premises.
Note: It must not be located in office space jointly occupied with another travel agency
or an air carrier and not located at an airport. It must not be located on the premises
of an organization, plant or commercial firm to which it handles a substantial amount
of travel business unless the travel agency operates separately of the other
business(es).
2)
The name of the travel agency must not be the same or misleadingly similar to that of
an IATA Member Airline.
3)
4)
Must not have entered into a general sales agency agreement with an IATA Member
Airline, or non-IATA airline.
5)
Have in place security for the safekeeping of airlines' tickets, plates, CRS terminals
and printers, etc. A steel fireproof safe of a minimum weight of 182 kg. If under 500
kgs, safe must be bolted, cemented or otherwise secured to wall or floor.
The premises must be adequately secured with locks on all doors, alarms and
watchmen, as appropriate to the location.
6)
Balance Sheet and Profit & Loss Account prepared in accordance with local
accounting standards of the country of incorporation, audited or certified by
outside public accountant and not more than six months old.
285
Photographs of the travel agency premises, one of the interior and one of the
exteriors.
286
Philippines
PHILIPPINES
(Effective 1 June 2011 Mail Vote OA/E23)
1. Finances
1.1 The applicant must have conducted travel agent business for at least twelve (12)
months.
1.2 Applicants must have, as a minimum:
1.2(a) paid-up capital of PHP 3.0 million,
1.2(b) working capital of PHP 1.2 million, and
1.2(c) a minimum Financial Guarantee of:
1.2(c)(i) PHP 2.0 million, for new applicants
1.2(c)(ii) enrolment in the DIP program for DIP eligible Agents, or
1.2(c)(iii) highest consecutive 6 weeks net sales from the last 12 months. For the purpose of
calculating this number, the 12 month calculation period is the 12 months prior to 45 days
before the expiration of the current Financial Guarantee. In calculating the net sales, all USD
net sales are converted to PHP using the average Airline Conversion Rate (ACR) for the 6
week period. If the Financial Guarantee is in USD, then PHP net sales will be converted to
USD using the lowest ACR for the six week period.
1.2(d) when assessing whether the applicant and existing Agent meets the financial standing
the following shall be taken into account.
CRITERIA
FORMULA
Liquidity
Rating
30
15
0
Stability
Values
2.00 or less
2.01 to 3.00
3.01 to 4.00
4.01 and above
Rating
20
12
5
0
287
Philippines
Net Income (Before Tax) / total Revenue
Profitability
Values
0.050 and above
0.000 to 0.049
Below 0.000
Investment Returns
Rating
15
10
0
Values
Greater than 0.0
0.0 and below
Rating
5
0
Payment History
Rating
10
5
0
Values
0 or 1
2
3 and above
Risk Assessment
Rating
20
10
0
Risk Category
CA1: 90-100
CA2: 80-89
CA3: 70-79
CA4: 60-69
CA5: 50-59
CA6: 49 and below
1.2(e) An agent must have a minimum financial rating of CA3 (average risk) or the
equivalent financial rating of any appointed financial agency by the Agency
Administrator;
1.2(f) The management of existing agents who should get a rating of CA4-CA6 for their
financial evaluation is under Subparagraphs 1.3(a) to 1.3(c).
1.3(a) Agents who are on Default Insurance Protection (DIP) program may opt not to increase
their existing coverage;
288
Philippines
1.3(b) Agents who are on holdout of other types of financial guarantees, except for Surety
Bond holders, must either increase their financial guarantee amount by 50%, or enroll in a
DIP program for the entire amount of their coverage;
1.3(c) Agents who are on holdout of Surety Bonds must change to another type of acceptable
financial guarantee and increase their amount of coverage by 50% or enroll in the DIP
program for the entire amount of their coverage;
1.4 All IATA accredited agents who have been trading for a minimum of one year may be
eligible to submit financial securities recommended by the APJC Philippines and accepted by
IATA.
2 Premises
2.1 shall not be located on the premises of an organization, plant or commercial firm and
dedicated substantially to the travel requirements of that organization, plant or commercial
firm, unless it meets the following requirements:
2.1(a) it is a branch of an existing Accredited Agent, and
2.1(b) it is clearly identified as a travel office conducting its activities separately from other
activities in such premises, and
2.1(c) it is staffed exclusively by the Accredited Agent, and
2.1(d) where possible it shall have a separate telephone number,
2.1(e) it meets all other criteria of these Rules, including having its own separate security
facilities for safekeeping of Traffic Documents, except that it need not be freely accessible to
the general public.
289
Poland
POLAND
(Effective 1 January 2011)
Finances
Documents shall not be older than 6 months. A guarantee or an insurance bond which has to
be provided must be irrevocable and valid at least 15 months from the date of issue. A
guarantee or insurance bond may cover a group of agents.
New Applicants
New applicants have to submit an extract from the Commercial Register indicating that they
have been trading for at least 6 months and are required to submit:
a) Balance Sheet and Profit & Loss Account duly certified by an outside public auditor;
b) Ownership details;
Equity: The owner's equity (capital paid-in, reserves, profit or loss carried forward) should not
be lower than equivalent of 10,000 USD. If this requirement is not met a new applicant may
not be accredited.
Current Ratio: Current ratio (current assets over current liabilities) should not be lower than
1.2.
Debt Ratio: Debt ratio (long-term and short-term liabilities over owner's equity) should not be
more than 2.5.
Operating Profit: Profit & Loss Account must show an operating profit.
If a new applicant fails to meet any of the criteria, he may be accredited, provided a temporary
minimum insurance bond or bank guarantee (levels to be updated each year) is submitted in
accordance with requirements specified below;
Equivalent of:
Warsaw
Bialystok, Katowice, Krakow, Lodz,
Poznan, Szczecin, Trojmiasto, Wroclaw
Other cities
USD 50 000
USD 35 000
USD 20 000
Established Agents
Agents are required to submit:
a) Each year, a Balance Sheet and Profit & Loss Account, duly certified by an outside
public auditor.
b) Actual extract from the Commercial Register
c) Documents for each year must be submitted not later than June, 30 following year.
290
Poland
Equity: The owner's equity (capital paid-in, reserves, profit or loss carried forward) should not
be lower than equivalent of 10 000 USD. If this requirement is not met an established Agent
may not be retained.
Current Ratio: Current ratio (current assets over current liabilities) should not be lower than
1.2.
Debt Ratio: Debt ratio (long-term and short-term liabilities over owner's equity) should not be
more than 2.5.
If an Established Agent fails to meet the criteria, he may be retained, provided that an
insurance bond or bank guarantee is submitted. The amount of any insurance bond or bank
guarantee shall be a percentage calculated on of the most actual calendar year turnover of
the agent of ticket sales for IATA Member Airlines participating in BSP (commission and credit
card sales to be deducted). The percentage amount shall be 4% in 1998, 6% in 1999, 8% in
2000.
For Established Agents opening new branch location a temporary minimum increase of
insurance bond or bank guarantee will be required as specified below for the first year of
operation.
Equivalent of:
Effectiveness
All financial criteria for accreditation and retention enter into effect on January 2011, so that
the first year for agent evaluation is 2010.
291
Portugal
PORTUGAL
Finances
Documentation required
Existing Agents are required to supply a copy of the Official Balance Sheet and Profit and
Loss Account form after stamped receipt from the Tax Department, covering the previous
Financial Year.
Any additional information may be required if needed.
292
Portugal
New Applicants
New Applicants submitting an insolvent Balance Sheet will be disapproved.
All New Applicants must have an initial Bond value of Euros 75.000.
License
License issued by Direcco Geral de Turismo.
293
FINANCES
1.1 Agents will be required to provide sufficient financial guarantee as detailed below.
1.2 Fulfilment of this obligation will remove the requirement to file Audited financial statements
1.3 New applicants shall be legally established companies holding a valid tourism licence for
at least 12 months and should have filed at least one set of Statutory Accounts with the Fiscal
Authorities within the last 12 months. The applicant must have access to CRS and work with
airlines directly or via another IATA Accredited Location. A ticketing sales report for this
period must be presented at accreditation and endorsed by the airline or IATA Accredited
Location.
2.
2.1 Bank Guarantee or Insurance Guarantee to be provided by all Agents during the first two
years of trading as an Agent. All guarantees shall be issued for a period of at least 6 months
in a form agreed by IATA. Expiring guarantees shall be renewed and presented to IATA no
later than 15 days before expiration.
2.2 Amount of Guarantee Required
2.2 (a) The amount should be calculated on the basis of the estimation, as provided by the
applicant, of the agents BSP cash turnover in his first year as IATA accredited agent,
adjusted for the numbers of Days Sales at Risk
2.2 (b) The number of days sales at risk is to be counted from the beginning of the
reporting period to the remittance date in respect of that reporting period, plus a margin of 5
days. For Romania and Moldova this is 35 days. The result is to be divided by 360days, and
then applied to the annual cash turnover estimation to calculate the estimated Amount at Risk
and the amount of guarantee required.
2.3.The minimum level of guarantee in the first 2 years of trading amounts to 30,000 EUR.
The local IATA manager may review the level of the guarantee after first month based on the
Amount at Risk computed with reference to the average net cash sales of the Agent during
that period. The amount of guarantee required will be increased if it is found to be insufficient
to cover the Amount at Risk.
3.
Agents which have completed two or more years of trading as an IATA Agent without a
financial irregularity (late payment, dishonoured cheques, etc) in the previous twelve months,
will be given the option to:
3.1 Continue to provide a guarantee to cover the Amount at risk in full. The level of Agents
guarantee will be reviewed based on the business of the previous accounting year. The
minimum level of guarantee is 30,000 EUR.
294
Or
3.2 Submit Statutory Accounts, together with a self-assessment form, for the most recent
accounting year-end. The amount of guarantee required will be determined in line with the
criteria for evaluation of Agents Financial Performance.
4.
295
Total Assets
---------------Total Debts
>1
CHANGES IN OWNERSHIP
5.1
Notification to the Accreditation department of a change in ownership or charge in
control, other than the cases of corporations where the shares are regularly traded through a
recognized stock exchange, should be accompanied by the most recent Statutory Accounts to
be presented within sixty (60) days from the change in control.
5.2
Failure to provide accounts within the due date will result in Agent being treated in the
same way as a recently accredited Agent: the Agent will be required to provide within thirty
(30) days a guarantee to cover the Amount at Risk.
6.
CHANGES IN YEAR-END
FINANCIAL REVIEWS
7.1 All agencies may be reviewed by periodical examination of the financial standing in
accordance with Subparagraph 2.2 of Resolution 818g Section 2 in order to determine their
financial stability and amount at risk.
7.2 Notwithstanding the frequency of periodic reviews, Accredited Agents must submit annual
Statutory Accounts. Failure to do so within the due date as advised by IATA, will result in the
296
Agent being required to provide a guarantee to cover the Amount at Risk in full, within 30
days from being notified.
7.3 The amount of guarantee may be reviewed at anytime during the year if the value of
actual Amount at Risk exceeds by more than 20% the existing amount of guarantee.
7.4 The financial reviews are conducted in accordance with the criteria for evaluation of
Agents Financial Performance
297
Russian Federation
RUSSIAN FEDERATION
(Effective 1 January 2011 PAC/33)
General
The applicant should possess a copy of registration form, copies of valid corresponding
licenses, a copy of statute, a copy of constituent agreement from the competent authorities.
All these documents must be notarized.
Branch Office Ownership
Agents must wholly own and fully manage the business for which approval is sought as a
branch office location. The branch must be part of the same legal entity as the head office.
Business Ethics
The applicant, its principal stockholders /or persons for whom they act as nominees, directors,
officers and managers must not have an unsatisfactory record with regard to adherence to
ethical business practices, nor be undischarged bankrupts.
Involvement in Previous Default
No person acting as a director or with a financial or managerial interest in the applicant must
have been involved with an Approved Agent previously removed from the Agency List for
default, or under notice of review for default, with debts still outstanding to Members or where
debts were met through a financial bond or guarantee.
Staff
The Agent must have in its employment competent and qualified staff able to book, tariff and
sell international air transportation and correctly issue electronic travel documents and report
these to the BSP.
Premises
The place of business for which approval is sought shall be open for business on a regular
basis, be clearly identified as a travel agency and freely accessible to the general public for
the sale of international air transportation.
The Agency and/ or place of business shall not be identified as an office of an airline or group
of airlines, nor have a name the same as that of a Member of IATA, or of IATA.
Name of the Agency
The applicant must not have a name which is the same as, or is misleadingly similar to, that
of an IATA Member, or IATA. The place of business must not be identified as an office of a
Member or a group of Members.
298
Russian Federation
GSA Appointments
Must not have entered into a general sales agency agreement with an IATA Member Airline,
or non-IATA airline.
Security
The premises must be adequately secured with locks on all doors, alarms and watchmen, as
appropriate to the location.
Validation of Traffic Documents
Once approved, the Agent must comply with the provisions of Resolution 822 in respect of the
issue of Traffic Documents.
Productivity
The application must be supported by the Statement of International Sales. There is no
minimum level that an applicant should reach before submitting the application.
Bank Guarantee
The amount of any guarantee is determined only after examination of the financial documents
and is subject to final approval by IATA
All new applicants and Agents, which have not completed two years of trading, must submit a
Bank Guarantee, which will cover the 22 days sales at risk amount but cannot be less then
50,000 USD.
All IATA Agents which have completed two years of trading without a financial irregularity in
the previous twelve months, submit a Bank Guarantee according to the following sliding
scale:
Agent's 22 day's
risk turnover
amount
at
Required BG Coverage
<
$50,000
=
$ 50,000
2 > $50,000
<
$100,000
=
3 > $100,000
<
$500,000
=
4 > $500,000
<
$1,000,000 55% but not less than $ 325,000
=
5 > $1,000,000
<
$2,000,000 35% but not less than $ 550,000
=
6 > $2,000,000
<
=
below
299
Russian Federation
After two short payments Agent has to provide a full Bank Guarantee.
APJC establishes the criteria for banks.
Bank Guarantee form has to comply with IATA requirements.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents and located on IATA website.
The link is communicated to each Approved Location.
300
Rwanda
RWANDA
(Effective 1 April 2010 Mail Vote A178)
1.
FINANCES
1.1
Financial Statement
Audited annual financial statements duly certified by a Certified Public Accountant disclosing
airlines sales and aged debtors must be produced annually and supplied to the Agency
Services Office (ASO) within 6 months of the agents financial year-end.
The accounts should reflect a satisfactory financial standing i.e.:
(a) Positive Net Profit
(b) Positive liquidity ratio
(c) The minimum Share Capital should be at least 1 % of the annual turnover
Should the audited accounts indicate that the Agent is insolvent, the Agent will be stopped
from trading with immediate effect. If the position is not redressed within 60 days, the Agent's
agreement will be terminated and Agency removed from the Agency List.
1.2
Financial Review
ii.
The ASO office determines that the Agent is required to undergo financial
review in accordance with relevant IATA resolutions and international
accounting standards relating to financial review of Agents and the reason for
such review shall be made known to such Agent.
1.3
Financial Security
(a)
In line with Resolution 850p, an Agent must provide an acceptable Financial Security
in terms of Bank guarantee or Default Insurance Programme.
(b)
All Insurance Policies and Bank Guarantees must be drawn up as per the IATA Model
documentation.
(c)
The minimum Bank Guarantee level shall be USD 25,000 or equivalent local currency.
(d)
Should an agent decide to go on frequent remittance, such agent will qualify for a
reduction of 40 % of the Bank Guarantee.
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Rwanda
(e)
IATA/BSP will have the right to request for additional Bank Guarantee if the average
sales exceed 50% during a period of any 4 months. In the case of Agents under a
Default Insurance Programme, a separate Bank Guarantee may be required for
Agents trading above the cover limit.
(f)
Bank guarantees and additional guarantees MUST be submitted to the IATA Office
latest within 4 weeks from the date of request.
(g)
BSP will be mandated to remove Ticketing Authority and Traffic documents if the
agent fails to provide guarantees as requested.
The agent should not have more than 2 instances of irregularities for late payment
issued against the agency in the previous 12 months
(b)
The Agent must not have been in default (Due to the agent's own fault).
(c)
A change of name will not affect the Agent's record of irregularities over the last 12
months.
(d)
(e)
The disposal or acquisition by any person of stock representing 30% or more of the
total issued share capital of the agent will involve a Financial Review.
% Discount
Nil
15
30
40
60
Notwithstanding the above, a Minimum Bank Guarantee USD 25,000 or in equivalent local
currency must be provided.
2.
NEW APPLICANTS
Agency must have been in operations for at least 6 months as a travel Agent before applying
for IATA approval.
A bank guarantee will be required based on average 6 weeks cash trading less paid-up
capital or USD 25 000 / equivalent local currency whichever is higher. Alternatively, agency
may join the Default Insurance Programme.
Option of fortnightly remittance with a reduction of 40 % in the level of Bank Guarantee
302
Rwanda
3.
The Agency must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and report
these to the BSP.
4.
BSP PROCEDURES
Information on the procedures and responsibilities of Agents in respect of the reporting and
settlement rules is contained in the BSP Manual for agents supplied to each Approved
location.
IATA offers regular BSP procedures training sessions. Any Agent wishing to undertake such
training is encouraged to contact the local BSP office.
303
Saudi Arabia
SAUDI ARABIA
(Effective 1 November 2010 PAC/33)
Finances
1.1 Submit certified financial documents of not more than six (6) months old, and covering at
least 12 consecutive months, to determine the need for, and/or amount of, a Bank Guarantee;
or
1.2 Submit a bank guarantee of SAR 1,000,000 and opening financial documents which need
not be certified. After the first year of approval, certified financial documents must be
provided.
2. Applicants with an IATA approved and operating Head Office location wishing to obtain
IATA accreditation of an existing and operating (for a minimum of one year) unapproved
branch, may not be required to provide financial documents or an additional bank guarantee.
For a minimum of one year as used in this clause it will be confirmed by:
3. For applications for branches which have existed less than one year, financial documents
of the approved and operating HO should be submitted.
4. Agencies may be required to undergo a periodic review and provide certified audited
financial documents which should meet current criteria for retention. However it is essential
for newly approved agents to be reviewed after six months from approval date and submit
fresh audited accounts.
Audited Financial Documents
Balance Sheet/Income Statement not older than six months at time of submission and
covering at least 12 consecutive months, or,
Financial Statement of previous year plus latest six months;
Ageing statement of accounts receivable and accounts payable covering the same period
as above;
Proof that a dedicated bank account for the agency exists;
If necessary, account activity bank statement will be requested.
All of the above documents must be duly certified/stamped and signed by a chartered or
certified public accountant. They should also be provided in duplicate and in the English
language.
304
Saudi Arabia
Bank Guarantee
For the first year, an auto renewable bank guarantee of SAR 1,000,000 is required of all new
agents unless able to provide certified financial documents covering at least the previous 12
months. The bank guarantee amount will be reviewed after 6 months from appointment based
on evaluating agents sales Remittance performance and sales volume in comparison with
amount of submitted guarantee and in accordance to financial review of his audited accounts.
The agent will be reviewed financially after 6 months from appointment based on a financial
statement provided by the agent covering at least 6 months including a balance sheet, profit
and loss statement, aging statement of debits and credits, and a summary of sales. The
following will be used to determine the requirement for, and/or the amount of, the bank
guarantee:
(a) Agent accounts should not show a loss;
(b) Agent should show a favorable liquidity ratio (Current Assets/Current Liabilities) of not less
than 1:1;
(c) Agent should show a collection period of Accounts Receivable of not more than an
average of 30 days.
(d) Current assets less current liabilities (the net current assets) must be greater than the
amount at risk (Average annual net cash sales multiplied by the number of days sales at
risk ). The amount by which the net current assets fall short of the amount at risk must be
covered by guarantee from the agent, to be furnished by the agent within thirty (30) days
from the day being notified to do so.
Staff
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location. Additional copies can be requested through your local BSP contact.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
License
A valid license to trade from the Supreme Commission of Tourism and Antiquities, in
accordance with their resolution, is required.
Agents should also hold a valid Commercial Registration (CR), covering travel agent activity
at the location. Companies to provide attested copy of their Articles of Association.
305
Scandinavia
SCANDINAVIA
(including Denmark, Greenland, Iceland, Norway and Sweden)
(Effective 1 January 2011 PAC/33)
Finances
The financial aspects of IATA applications are evaluated by a national financial group or by a
Financial Assessor in the employ of the Agency Services Office who can act upon advice
from a national advisory group.
Only companies that are financially sound will be approved. Applicants must submit with the
application a full set of audited accounts for their company for the most recent financial year.
Financial statements must show a positive balance of current assets over current liabilities.
Documents must be produced by a nationally approved Public Auditor in accordance with
generally accepted accounting principles and national legislation. IATA has the right to require
the documents to be translated to English.
Accredited Agents are obliged to submit a copy of their audited Annual Report and Accounts
in accordance with time frame for filing reports required by the local authority in each country.
For Agents that are not required by national law to file the Annual Report, or for Agents that
fail to provide a copy of the annual report and accounts within the deadline stipulated above,
there will be an automatic demand for Bonding/Guarantee according to the rules set forth in
this chapter.
Companies with less than one year's trading record must submit a copy of a certified opening
balance sheet.
The minimum financial criteria for Denmark, Norway and Sweden fall into two areas, key
figures and credit rating. For Iceland, the financial criteria is only based on the key figures,
and any reference to credit rating below can be disregarded.
The key figures defined below for Equity (a) and Solvency (b) form the basis of a total
consideration, but current credit rating of the company, obtained from a credit information
company appointed by IATA/ASO, is also taken into account to form a complete evaluation of
the financial status and credit worthiness of an applicant/Accredited Agent.
The credit rating so obtained for a specific Agent must at all times exceed the Dun &
Bradstreet B rating (or the equivalent rating from another supplier).
An Agent that is rated as Dun & Bradstreet B rating, or a No Rating status, will be
requested to submit a bank guarantee within 60 days, or take action to have their credit rating
changed.
An Agent that is rated as Dun & Bradstreet C rating will be requested to submit a bank
guarantee within 30 days or take action to have their credit rating changed.
In addition, an Agent that has received bank guarantee request based on unsatisfactory
rating, has the possibility to send proof of a satisfactory rating from a second rating company,
approved by IATA.
Following rating classes / companies are currently approved:
306
Scandinavia
307
Scandinavia
the amount of the guarantee shall be 8.5% of the actual turnover from the last 12
months ticket sales for IATA Member Airlines and Airlines participating in the Billing
and Settlement Plan for 4 payments per month.
Guarantor
Where Accredited Agents are wholly owned subsidiaries, parent company guarantees may be
approved if the Guarantor met one of the following criteria:
Payment ability
Equity capital contingent liabilities & the guarantee amount
Total capital= min 6% and Solvency = min 1
Group's consolidated result: If the Agency meets the equity capital criteria and the
group's (the guarantor being the parent company) consolidated accounts meet the
approved criteria for equity capital and solvency and show a profit before extraordinary
items, such parent company should be found satisfactory.
Rating: Guarantee amount less than equity capital and rated as high credit
worthiness (or the equivalent rating in local language), such parent company should
be found satisfactory as guarantor.
308
Scandinavia
Release of guarantee/bond
An Agent/Accredited Agent who is required to submit a bank guarantee has the right to have
his financial situation reviewed each year and also to be re-examined in the period between
two financial year ends if such changes in his financial situation can be referred to that might
reduce or abolish the guarantee requirement, proven by an audited financial statement
covering a period of minimum six (6) months. Still, in order for a bank guarantee to be
released, both financial statement and credit rating must show satisfactory results, as per
these criteria.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location. IATA offers regular BSP procedural training sessions. Any agent wishing to
undertake such training is encouraged to contact the local BSP office.
Licence
Denmark No special legislation
Greenland No special legislation
Iceland Licence from the Ministry of Communication & Transportation
Norway No special legislation
Sweden No special legislation
309
I.
FINANCIAL CRITERIA
1.
1.1
New Applicants
An Agent who applies for IATA accreditation must provide the following documents for
assessment under the financial ratios in section 1.2:
An Agent is considered as a New Agent for a period of two years from the date they
become an Agent.
1.2
Financial Assessment
Financial evaluation for Agents in Serbia & Montenegro will be performed at least
yearly.
An Agent must comply with the following elements:
310
The cost of the provision of all financial documents must be borne by the Agent
1.4
The Agent will be considered as a high-risk Agent for the next 12 months, until the
next yearly financial assessment.
2.
FINANCIAL SECURITY
2.1
Bank guarantees are required from all Accredited Agents and New Agents
financial security.
2.2
All banks approved by National Bank of Serbia (NBS) and National Bank of
Montenegro (NBCG) are authorized to issue the guarantee.
2.3
All Agents must possess valid a bank guarantee all the time.
as
In the case of Serbia, due to the fact that the only BSP currency is the local one
(RSD) and that bank guarantee amounts are expressed in EUR currency, the
exchange rate applied will be the NBS (National Bank of Serbia) official middle rate
valid on the date when the information regarding the bank guarantee amount should
be sent to the Agent.
The bank guarantee amount will be rounded up to the nearest 1.000 EUR above the
amount resulting from the calculation.
2.4
New Agents must provide a bank guarantee to the amount of 25.000 EUR.
2.5
Existing Agents
The full bank guarantee amount is based on the average 30 days cash turnover in the
previous 12 consecutive months ending with the last remittance period for which
information is available.
(a)
Normal risk Agents with average 30 days cash turnover between 0 EUR and
100.000 EUR will be required to provide 75% of a full bank guarantee with a
minimum amount of 25.000 EUR.
(b)
Normal risk Agents with average 30 days cash turnover between 100.001 EUR
and 200.000 EUR will be required to provide a bank guarantee that covers
70% of a full bank guarantee with a minimum amount of 75.000 EUR.
311
(c)
Normal risk Agents with average 30 days cash turnover over 200.001 EUR will
be required to provide a bank guarantee that covers 65% of a full bank
guarantee with a minimum amount of 140.000 EUR.
(d)
High risk Agents will be required to provide a full bank guarantee increased by:
(i)
(ii)
10% if the High risk Agent meets one of the High risk Agent criteria;
or
25% if the High risk Agent meets two or more of the High risk Agent
criteria
2.6
An adjusted bank guarantee will be requested only in case when existing bank
guarantee amount required to be increased/decreased by more than 10%.
When the conditions to perform remittance/settlement on a weekly basis or
VMFR (voluntary more frequent remittance) basis are met by any Normal or
High risk Agent, level of the bank guarantee for that Agent will be decreased
by an additional 25%.
312
Singapore
SINGAPORE
(Approved OA/29 December 2010)
1. Finances
1.1 applicants must:
1.1(a) have as a minimum paid up capital of SGD 100,000, and
1.1(b) be established and in business as a travel agent not less than twelve months prior to
the date of application, provided that if an applicant with less than twelve months trading
record may be approved if the applicant furnishes a minimum financial security of SGD
50,000 valid until the receipt of audited annual accounts, provided further that during this
period if the average monthly sales exceeds this amount it shall be adjusted accordingly.
This financial security should be provided in addition to the minimum security required based
on the assessment result.
1.2(a) when assessing whether the applicant meets the financial standing described in
Subparagraph 1.1 of this Paragraph the following shall be taken into account.
1.2(a)(i) Financial Assessment Indicators
Paid-up Capital
100,000
100,001 - 150,000
150,001 - 180,000
180,001 - 210,000
210,001 - 300,000
300,001 - 500,000
500,001 - 700,000
700,001 - 1,200,000
1,200,001 - 10,000,000
Score
1
2
3
4
5
6
7
8
9
Business Scale
1 - 1,000,000
1,000,001 - 2,700,000
2,700,001 - 5,000,000
5,000,001 - 6,500,000
6,500,001 - 8,000,000
8,000,001 - 10,500,000
10,500,001 - 13,500,000
13,500,001 - 20,800,000
20,800,001 - 35,000,000
Score
1
2
3
4
5
6
7
8
9
> 10,000,000
10
> 35,000,000
10
Profitability*
< (250,000)
Score
1
Liquidity
0.01 - 0.60
Score
1
(249,999) - (90,000)
0.60 - 0.75
(89,999) - (22,000)
(21,999) - 0
1 - 5,000
5,001 - 16,500
16,501 - 39,500
39,501 - 90,000
90,001 - 213,000
3
4
5
6
7
8
9
0.75 - 0.95
0.96 - 1.05
1.06 - 1.17
1.18 - 1.26
1.26 - 1.45
1.46 - 1.68
1.68 - 2.50
3
4
5
6
7
8
9
> 213,000
10
> 2.51
10
313
Singapore
Leverage
negative or >25.00
12.51 - 25.00
6.01 - 12.50
4.31 - 6.00
3.11 - 4.30
2.12 - 3.10
1.61 - 2.11
1.01 - 1.60
0.66 - 1.00
Score
1
2
3
4
5
6
7
8
9
Reserve
< (1,750,000)
(1,749,999) - 90,000
90,001 - 130,000
130,001 - 200,000
200,001 - 400,000
400,001 - 680,000
680,001 - 1,200,000
1,200,001 - 2,300,000
2,300,001 - 7,500,000
Score
1
2
3
4
5
6
7
8
9
0.01 - 0.65
10
> 7,500,000
10
Margins Trend **
Score
5
3
A
B
-3
35-45
-5
12-34
<12
Fail
If an agent fails the annual financial review, agent may be accepted if the paid up capital of
the company is increased to show a positive net worth. The agent must forward ACRA
document as evidence.
1.2(a)(ii) Minimum Financial Security for an existing agent is SGD 40,000 or equivalent to 2
weeks average sales based on the last 12 months activity whichever is higher.
1.2(a)(iii) The final security required may vary subject to the score/rating scale of the agents
financial assessment result, subject to minimums in paragraph 1.2(a)(ii).
Financial Security Required
25% of minimum Security required
50% of minimum Security required
75% of minimum Security required
100% of minimum Security required
Score
A
B
C
D
1.2(a)(iv) It is recognized that different interpretations of financial accounts are possible and
do occur. Accordingly, the Financial Assessor shall have discretion as to the most
appropriate classification in accordance with standard accounting practices for all items
included in the statements.
It is in the applicants best interest to supply any additional information that has a bearing on
the review.
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Singapore
1.3 Enrolment in an IATA approved Default Insurance Program (DIP) is accepted in lieu of
provision of financial security.
2. Premises
2.1 if located on the premises of an organisation, plant or commercial firm and dedicated
substantially to the travel requirements of that organisation, plant or commercial firm, be a
Branch of an existing Accredited Agent and meet all the qualifications of this Section, except
that it need not be freely accessible to the general public.
315
Slovenia
SLOVENIA
(Effective 1 June 2009)
New Applicants
New applicants will be required to present to a bank guarantee corresponding to an estimated
35 days worth of cash sales. The minimum amount of the bank guarantee is 15,000 EUR and
is required during the period of 2 years. The level of bank guarantee is checked quarterly and
adjusted if the amount of turnover increases.
Accredited Agents
1. Net profit in the accounting period
2. No blocked periods for the current accounts in the last 12 months
3. No Notices of Irregularity for overdue/dishonoured remittances within the last 12 months
4. Short-term liquidity coefficient:
Current assetslong-term business claims >-1
Short-term financial and business liabilities
If the Agent complies fully with all the other criteria, a short-term liquidity between 0,75 and 1
is acceptable. In this case, the Agent must meet the following additional criterion: the cash
and cash equivalents must be comparable to the average cash sales on behalf of BSP
Airlines in 10 days. The 10 day average is calculated using the Agent's BSP sales for the past
12 months.
5. Equity ratio
___Equity__
Total assets
A bank guarantee of 35 days' cash sales is required when an Agent does not meet one of the
above criteria.
Required documentation for the Agent financial assessment
1. Profit and Loss Account
2. Balance Sheet
3. Solvency assessment provided by all commercial banks, where the Agent has opened its
current accounts
4. Audit Report (where required by Slovenian legislation)
Balance sheets and Profit & Loss reports can be copies with original stamp and signature.
Agencies (all type of entities such as limited liability company, limited partnership, unlimited
(liability) company, sole trader) are required to provide IATA with the documentation specified
above by 30 April of the current year.
Agencies registered as Joint Stock Companies (d.d.) are required to submit entire
documentation (including external Audit report) by 31 July of the current year.
316
Slovenia
The assessment is carried out on the basis of Slovenian legislation, Slovenian Accounting
Standards and valid practice.
An Agency can apply for voluntary financial review at any time at its own expense. Such
review could result in decrease or elimination of existing bank guarantee.
Bank Guarantee
The bank guarantee has to be issued by a high-rated bank authorized by the Bank of
Slovenia. The bank guarantee may be replaced by insurance accepted by IATA/ASO office,
which is issued by a reputable insurance company or another acceptable financial institution.
Following the annual financial assessment, Agencies are obliged to submit BG one month
after it has been requested. BG should be valid for one year.
The level of the bank guarantee is checked quarterly and adjusted if the amount of turnover
increases.
Staff Qualifications
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
License
Official Travel Agent license is required.
Automation
The office must be equipped with a CRS and a ticketing system.
Security
Minimum security standards set in Resolution 818g Section 5 apply.
317
FINANCIAL EVALUATION
The term applicant where used in these Criteria shall be understood to include an
Accredited Agent.
The applicant shall provide audited or certified financial statements prepared in accordance
with standard accounting practices. Such statements shall be evaluated and found
satisfactory pursuant to the financial standards and financial ratio analysis established from
time to time by the South West Pacific General Assembly and set forth in this Handbook.
To obtain a satisfactory evaluation, the applicant will be required to provide additional
financial support in the form of a bank guarantee or an insurance cover from an Insurance
Company acceptable to IATA.
For Fiji the bank guarantee or insurance cover will be equivalent to three weeks average BSP
sales net of credit card sales and commission for weekly reporting transacted for international
sales. For Tonga the bank guarantee or insurance cover will be equivalent to three weeks
average BSP sales net of credit card sales and commission for weekly reporting transacted
for international sales. For Samoa the bank guarantee or insurance cover will be equivalent to
three weeks average BSP sales net of credit card sales and commission for weekly reporting
transacted for international sales. For the Cook Islands the bank guarantee or insurance
cover will be equivalent to five weeks average BSP sales net of credit card sales and
commission for fortnightly reporting or three weeks average BSP sales net of credit card sales
and commission for weekly reporting transacted for international sales. For Vanuatu the bank
guarantee or insurance cover will be equivalent to 3 million Vatu or 4 weeks average turnover
transacted for international sales whichever is the greater. For all other countries the bank
guarantee or insurance cover will be equivalent to four weeks average turnover for
international sales.
The financial statements will be evaluated by a Financial Assessor appointed by the Agency
Services Manager.
1.
PREPARATION
1.1
1.2
1.3
318
1.3.1
Gross Sales includes ticket sales, package tours, hotels, car rental, insurance,
accommodation, miscellaneous income, etc. net of VAT or any other similar tax
imposed within the countries covered by this Criteria and before deduction of
commission. Non-travel turnover should also be included.
1.3.2
Salary to directors and shareholders. Also franchise fees and management fees which
may need to be considered in assessing profitability should be disclosed.
1.3.3
1.3.4
1.3.5
2.
FINANCIAL STANDARDS
2.1
Minimum Capital
Each applicant shall have minimum paid up share capital of FJD 20,000 for Fiji, WST
30,000 for Samoa, NZD 30,000 for Cook Islands, TOP 10,000 for Tonga, VATU1.5
million for Vanuatu and for other countries the capital should be paid up sufficient so
that the company is not undercapitalized in the overall total funds employed by the
company.
For each branch location, the applicant must increase paid up share capital by FJD
5,000 for Fiji, WST 5,000 for Samoa, NZD 5,000 for Cook Islands, TOP 5,000 for
Kingdom of Tonga, VATU 300,000 for Vanuatu and SBD 5,000 for Solomon Islands in
addition to the minimum paid-up share capital or the following scale based on turnover
whichever is the greater.
319
320
Financial Assessment
The financial assessment is based on four tests and the allocation of the applicable
points to each test. Maximum points are 30 and a total of 15 points or more is
considered satisfactory providing the applicant maintains the minimum level of share
capital.
The maximum number of points obtainable is made up as follows:
Current Ratio
Debt Ratio
Profitability
Tangible Net Worth to Turnover
TOTAL
2.3
8 points
8 points
6 points
8 points
30 points
Current Ratio
Current Assets
Current Liabilities
This ratio provides a measure of the short-term solvency of the entity.
Current Assets: This amount excludes receivables from shareholders.
Current Liabilities: This amount includes the current portion of external long-term debt,
but excludes loans provided by shareholders or proprietors.
321
8 points
7 points
6 points
5 points
4 points
3 points
2 points
1 point
0 points
Debt Ratio
___Total Debt___
Tangible Assets
This ratio measures the amount of assets provided by creditors for each dollar of
Tangible Assets.
Total debt: Includes current liabilities and all loans from third parties and includes
loans provided by shareholders or proprietors.
Tangible Assets: Total Assets (including receivables from shareholders and related
parties) less intangible assets such as goodwill, franchise fees, client lists and
preliminary expenses. Goodwill attaching to premises will be classed as intangible
unless supported by a written valuation from an independent valuer.
Under 0.50
0.50 0.59
0.60 0.69
0.70 0.79
0.80 0.89
0.90 0.99
1.00 1.19
1.20 1.29
Over 1.29
2.5
8 points
7 points
6 points
5 points
4 points
3 points
2 points
1 point
0 points
Profitability Ratio
Net Profit after Tax__
Shareholders Funds
x 100
1
This ratio is a measure of how well the owner's investment has been employed by
management.
Net Profit after Tax: Profit after taxes but before extraordinary items.
Shareholders Funds: This is calculated by summing share capital plus retained
earnings (minus deficit) plus other reserves.
Over 19.99%
15.00% 19.99%
10.00% 14.99%
0% 9.99%
Under 0%
6 points
5 points
4 points
3 points
0 points
322
3.
8 points
6 points
4 points
3 points
2 points
1 point
0 points
FINANCIAL DISCRETION
It is recognized that different interpretations of financial accounts are possible and do
occur. Accordingly the Financial Assessor shall have discretion as to the most
appropriate accounting classification in accordance with standard accounting practices
for all items included in Financial Statements.
4.
5.
FINANCIAL REVIEW
A fully review of all Accredited Agents will be carried out periodically by a duly
appointed Financial Assessor. All financial data and documents required for this
purpose are to be submitted by the date specified in the Agency Services Manager's
letter of request. Late or incomplete submission by an Agent of such data and/or
documents will attract an administrative charge. The amount of the administrative
charge shall be as determined from time to time by the Passenger Agency
Conference.
323
Southern Africa
SOUTHERN AFRICA
(including Botswana, Lesotho, Namibia, South Africa and Swaziland)
Finances
For individuals trading as sole proprietors, a statement of assets and liabilities certified by an
Auditor must be supplied. For companies and close corporations, audited financial
statements must be supplied.
Credit review of applicants by an approved credit bureau to ensure that the applicant is not an
unrehabilitated insolvent or has a history of solvency problems. Audited annual financial
statements must be produced and supplied to the ASO office within six months of the Agents
financial year end. The ASO will remind the Agent two months prior to the date on which their
financial statements are due. Agents can provide any additional information that they
consider important.
An Agents balance sheet should demonstrate certain minimum financial ratio and disclosure
standards. These are:
Solvency
Current ratio (current assets to current liabilities):
1:1 Minimum
Both debtors and creditors are to be analyzed either on the face of the balance sheet or the
notes thereto specifying TRADE debtors/creditors separately. TRADE refers to those
amounts.
A positive net worth/shareholders interest should the balance sheet indicate that the Agent
is insolvent, that Agent will be suspended from trading with immediate effect. If the position is
not readdressed within 60 days, the Agent's agreement will be terminated. The subordination
of the Agency's loan account does not rectify the solvency of the Agency.
Profitability
Agents should operate their business with the intention to produce profit.
Guarantee
Following submission of the initial guarantee, subsequent review and setting of the guarantee
level will be calculated as follows:
Average six weeks cash trading over the
Last 6 months per BSP
xxx
xx
Guarantee required
yy
The guarantee required is directly affected by the Net Worth of the operations.
324
Southern Africa
Except: where an agent has been placed in default, and /or placed on a cash basis /
placed under review by IATA, the following will determine the guarantee for a period of
one year from the date of such notice by IATA:
Average six weeks cash trading over the
last 6 months per BSP
xxx
Guarantee required
xxx
If the agent has not defaulted/been placed on a cash basis/placed under review by IATA
during the one year period, the net worth of the legal entity as reflected in the audited annual
financial statements will once again be deducted from the guarantee required.
The guarantee amount can be further adjusted by frequency of payments to the BSP. If the
payment frequency is increased to every two weeks, the guarantee is reduced by one third. If
the frequency of payments is weekly, the guarantee is reduced by a further one third.
The guarantee must be issued by one of the following only:
Reduction of Guarantee
Special provision has been made for reduction in the Guarantee amount as set out above.
The adjustment of the Guarantee amount will be dependent on:
% Reduction
0%
10%
20%
30%
40%
50%
In addition, for Agencies that have been in existence for longer than 10 years (as an IATA
Agent) and which comply with the above criteria, it will be possible to apply for a 100%
reduction in their guarantee if their financial statements comply with the following:
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Spain
SPAIN
(Effective 12 September 2011 Mail Vote A199)
1.
A.
Documentation
Provided below is a description of the original documents required to become an
Accredited Agent. These documents must not be older than three (3) months from the
date of the Agent accreditation application described in the official form.
-
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Spain
B.
Financial Requirements
1.
The new Agent is a newly-formed agency (less than one (1) year since the formation
of the company):
The new Agent must provide a bank guarantee for an amount of seventy-five
thousand euro ( 75,000)
2.
The new Agent is a pre-existing agent (more than one (1) year since the formation of
the company):
IATA will appoint a company specialized in risk and solvency analysis and external
to both, travel agencies and airlines to perform impartial risk and solvency
analyses on the new Agent. The results of the analyses will give a score ranging
from zero (0) to ten (10), where ten (10) is the highest score and zero (0) the
lowest. Likewise, the external company will perform a creditworthiness
assessment and a RAI (Registro de Aceptaciones Impagadas, Unpaid
Receivables Registry) incidents analysis on the new Agent.
For the results to be valid, the new Agent must have submitted the accounts for
the most recent financial year to the Trade Registry by the deadline established by
law. If the Agent has been in operation for more than one (1) year but has not yet
been required to submit its accounts to the Trade Registry, the Agent must provide
its limited audited provisional accounts to the external company performing the
analyses. Otherwise, the results of the solvency ratio analysis will be considered to
be zero (0).
The Agent is required to achieve a score of at least five (5) in the results of each of
the analyses performed at the time of applying for accreditation as a new Agent.
The new Agent is also required to be given a creditworthiness rate above six
thousand (6,000) euros and to have no incidents in the RAI (Unpaid Receivables
Registry).
In addition to meeting the evaluation criteria, the new Agent is to provide a bank
guarantee of seventy-five thousand euro ( 75,000).
The bank guarantee provided by all new Agents under this section 1 to IATA at the time of
accreditation as a new Agent must continue in effect for a minimum period of three (3) years
from the date of the form of application to join the BSP as notwithstanding the result of any
financial assessment of the Agent required in accordance with section 4 of these financial
criteria during that time.
2.
A.
Documentation
Described below are the original documents required by IATA for a change in the ownership
of an Agent or in its shareholders (if the change involves a change in the control of the
company) to become effective. These documents must not be older than three months from
the date of the application for changes in ownership authorisation described in the official
form:
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Spain
B.
An original criminal record certificate [certificato de penales] of the new joint and
several administrator(s), Managing Director, legal representative(s) and director(s) of
the Agent.
Original, certified or attested certificate from the General Treasury of the Social
Security Office confirming that the new Agent is up-to-date with the payment of Social
Security contributions.
Limited audit carried out by a member auditor of the Official Registry of Auditors
(ROAC) of the accounts of the previous financial year submitted to the Trade Registry
and interim financial statements for the period spanning from the start date of the
current financial year to the date of the application for the change in ownership
authorisation.
Certified or attested photocopy of the change in ownership deed in which the names
of the new joint and several administrator(s), Managing Director, legal representatives
and director(s) of the Agent are clearly specified.
If the new joint and several administrator(s), Managing Director, legal representative(s)
and director(s) of the travel Agent are not EU citizens, they will have to provide a
certified or attested photocopy of their Spanish Residents Permit, which must be valid
for a minimum period of at least four (4) years.
IATA will appoint a company specialized in risk and solvency analysis and external to both,
travel agencies and airlines to perform impartial risk and solvency analyses on the Agent.
The results of the analyses will give a score ranging from zero (0) to ten (10), where ten (10)
is the highest score and zero (0) the lowest. Likewise, the external company will perform a
creditworthiness analysis and a RAI (Unpaid Receivables Registry) incidents analysis on the
Agent.
For the results to be valid, the Agent must have submitted the accounts for the most recent
financial year to the Trade Registry by the deadline established by law. Otherwise, the
result of the risk and solvency analyses will be consider to be zero (0). Likewise, the same
zero result will be applied to Agents whose accounts have not yet been required to be
submitted to the Trade Registry when the analysis is performed because of the short period
in which the Agent is in operation.
All Agents who have a change in ownership must submit a bank guarantee to IATA in
accordance with the Resolutions in the authorized format, for an amount equal to the average
fifty (50) days net BSP cash sales of the Agent over the previous twelve (12) months but
which can never be below the minimum value of seventy-five thousand euros (75,000).
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Spain
the results of the analysis on the agent range from five to ten (5-10)
the Agent is assigned a creditworthiness rating above sixty thousand euro (60,000)
(if the applicant is an Agent whose average cash turnover to the BSP in Spain in the
past twelve months is above one hundred and fifty thousand euros (150,000) or six
thousand euros (6,000) (if the applicant is an Agent whose average cash turnover to
the BSP in Spain in the past twelve months is below one hundred and fifty thousand
euro (150,000)
then the bank guarantee provided by the Agent to IATA at the time of the change in
ownership must continue in effect for a minimum period of one (1) year from the date of the
application for a change in ownership notwithstanding the result of any financial assessment
of the Agent required in accordance with section 4 of these financial criteria during that time.
If the results of the analysis differ from those mentioned above, the bank guarantee provided
by the Agent to IATA at the time of the change in ownership must continue in effect for a
minimum period of two (2) years from the date of the application for a change in ownership
notwithstanding the result of any financial assessment of the Agent required in accordance
with section 4 of these financial criteria during that time.
The above-mentioned financial requirements will not apply in the event of a transfer of
ownership inter vivos o mortis causa up to the second degree of kinship or affinity by
marriage as defined in Articles 915-920 of the Civil Code in Spain. This must be supported by
document certified by the Civil Registry.
If the Agent is controlled by one or more other companies registered in Spain, and the change
in ownership of the Agent results in a change to one or more of these controlling companies
of the Agent, the following documents must be provided to be included in the assessment
under the criteria stated in this section 2:
-
The risk and solvency analyses which produce the worst result will be used as the basis of
assessing the application for a change in ownership.
3.
A.
In the event of irregularity(ies) in any of the payments to the BSP giving rise to
default by the Agent, the Agent may be reinstated itself in the system provided that,
as well as meeting the requirements provided in the IATA Resolutions, a bank
guarantee in the authorised format is provided to IATA calculated as follows: For an
amount equal to the average fifty (50) days net BSP cash sales of the Agent over the
previous twelve months but not less than the minimum amount of seventy-five
thousand euros ( 75,000).
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Spain
B.
In the event of the Agent falling into a technical default as a result of accumulated
irregularities, the Agent may be reinstated in the system provided that, as well as meeting the
requirements provided in the IATA Resolutions, a bank guarantee in the authorised format is
provided to IATA calculated as follows: for an amount equal to the average
- fifty (50) days net cash sales of the Agent over the previous 12 months
In both the above cases the bank guarantee provided by the Agent to IATA at the time of
reinstatement must continue in effect for a minimum period of three (3) years from the date of
reinstatement as an Agent Notwithstanding the result of any financial assessment of the
Agent required in accordance with section 4 of these financial criteria during that time.
4.
A/ Agent whose average 50 days cash sales, taking the past 12 months as a reference, is
more than seven-hundred thousand (700,000) Euros on the date the continuity analysis is
performed.
IATA will appoint two companies specialized in risk and solvency analysis and external to
both, travel agencies and airlines to perform impartial risk and solvency analyses on the
Agent
Agents are required to have two impartial risk and solvency analyses conducted on a yearly
basis:
(a) the first time 46 days after the deadline established by law for submitting the annual
accounts duly signed by the administrators; and
(b) the second time 46 days after the deadline established by law for depositing the
annual accounts at the Trade Registry.
The Agent will also have the option to send directly to IATA a rating report prepared by either
of the two companies designated by IATA, as chosen by the Agent on a voluntary basis.
These reports must be:
(a)
(b)
send to IATA no later than 45 days after the deadline established by law for
submitting the annual accounts duly signed by the administrators or depositing the
annual accounts at the Trade Registry, whichever is applicable (the presentation
deadline), and
must not be older than seven (7) days from the presentation deadline.
If the voluntary report is sent by the Agent in accordance with the timeframes specified in this
criteria, IATA will not request any report and will use the analysis in the report sent by the
Agent as a reference.
If the Agents year-end is not 31 December, the Agent must notify IATA before the closing
date of its accounts.
For the results of each of the default and insolvency analyses to be valid, the Agent must
have submitted the annual accounts duly signed by the administrators or deposited the
annual accounts in the Trade Registry within the deadline established by law, whichever is
applicable.
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Spain
A1.
If the Agent has not sent a risk and solvency report on a voluntary basis, the report
requested by IATA to COMPANY 1 will provide results for which it is established that the
Agent is required to achieve a minimum score of four (4) in the results of the default analysis
and four (4) in the results of the solvency analysis to be able to operate without needing to
provide a bank guarantee to IATA.
A2.
If the Agent has sent a risk and solvency report on a voluntary basis in accordance
with the criteria described above, the results provided in the report will depend on the
company chosen by the Agent.
A2.1. if the chosen company by the Agent is COMPANY 1:
The Agent is required to achieve a minimum score of four (4) in the results of the risk
analysis and four (4) in the results of the solvency analysis to be able to operate without
needing to provide a bank guarantee to IATA.
A2.2. If the chosen company by the Agent is COMPANY 2:
It is established that the Agent is required to achieve a minimum score of nine (9) in
the results of the analysis to be able to operate without needing to provide a bank guarantee
to IATA.
Should any of the results of the risk and insolvency analyses not meet the minimum scores
described above, the Agent will be required to provide a bank guarantee to IATA that must be
in accordance with the Resolutions in the authorized format for an amount equal to the
average fifty (50) days net BSP cash sales of the Agent over the previous 12 months.
B.
Agent whose average 50 days cash sales, taking the past 12 months as a
reference, is below seven hundred thousand (700,000) Euros on the date
the continuity analysis is performed.
Copy of the annual accounts prepared and duly signed by the administrators in the
month following the deadline established by law for preparing the accounts
Copy of the duly completed annual accounts submitted to the Trade Registry in the
month following the deadline established by law for submitting the annual accounts to
the Trade Registry
In the case of companies obliged to audit the accounts, a copy of the audit.
To assess the Agents financial situation, the following minimum criteria will be applied:
Capital/Equity
The Agent's equity must:
-
not be less than 80 per cent of the authorized and paid-up capital; and
not be less than forty eight thousand and eighty euro and ninety seven cents
(48.080,97).
Short-Term Solvency
Short-term solvency = Current assets/ short-term debts (current liabilities).
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Spain
A weighting ratio of short-term solvency will be applied, based on the result of comparing
Equity with Authorised and Paid-up Capital.
To do this, the following table is applied:
Equity/Share Capital
>1,3
1,2
1,1
1
0,9
0,8
Weighting Ratio
1,10
1,075
1,05
1
0,95
0,925
The weighting ratio resulting from applying the table is multiplied by the short-term solvency
ratio and the result should be1 or above.
Earnings
The Agent must report pre-tax earnings of more than zero (0).
If an Agent does not manage to meet one of the criteria described in the sections above, it
must provide a bank guarantee or additional financial backing in the form of recapitalization.
The bank guarantee provided to IATA must be in accordance with the Resolutions in the
authorized format for an amount equal to the average 50 (fifty) days' net BSP cash sales of
the Agent over the previous 12 months.
If the Agent is controlled by one or more other companies registered in Spain, the controlling
company or companies must also meet the requirements described above. Under no
circumstances will it be enough for the requirements to be met by only the Agent or one of
those companies.
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Sri Lanka
SRI LANKA
(Effective 1 October 2011 Mail Vote A206)
1. Finances
1.1 the applicant must provide a certified and audited balance sheet and Profit and Loss
account not more than one year old.
1.2 applicant must:
1.2(a) be licensed by the Civil Aviation Authority of Sri Lanka for not less than 1 year with a
minimum paid up capital of LKR500,000 for all new applicants who will also fulfil the criteria
specified in 1.1;
1.2(b) be established and be in airline trading business of not less than one year prior to the
application. The applicant is also required to submit a minimum Bank Guarantee of LKR 3.45
million or 22 days trading whichever is higher (for thrice monthly settlement until 31 December
2011) and LKR 2.5 million or 17 days trading whichever is higher (for weekly settlement
effective 1 January 2012). The Bank Guarantee has to be issued by a bank with an
investment status rating from Fitch Lanka or an international rating from Standard & Poors,
Moodys or Fitch Ratings. The industry Bank Guarantee will be reviewed bi-annually based on
the average sales of the previous 12 months every June and December for effectiveness from
1 July and 1 January respectively.
1.3 when assessing whether the applicant meets the financial standing described in
Subparagraph 1.1, the applicant must be able to fulfil one of the following criteria:
1.3(a) Net equity less long-term debt should be positive
Net Equity: the sum between paid-up capital and accumulated profit/losses should be
positive. In case there is goodwill, it is subtracted from the sum previously computed. With
regards to partnerships and sole proprietorship (which do not have accumulated profit/losses
accounts), Net Equity is computed as beginning capital + additions drawings.
Goodwill is also to be deducted.
1.3(b) Net current assets should be greater than amount at risk
If not, the amount by which the net current assets fall short of the amount at risk must be
covered by a bank guarantee form the Agent, up to the ceiling stipulated in 1.2(b).
Net Current Assets: current assets less current liabilities. This must be a positive value.
Amount at Risk: Sales*22/365 (for thrice monthly settlement until 31 December 2011) or
Sales*17/365 (for weekly settlement effective 1 January 2012).
333
Switzerland/Liechtenstein
SWITZERLAND/LIECHTENSTEIN
GENERAL
An Agent cannot be appointed by an air carrier as a General Sales Agent for the country
concerned or for any part thereof.
An Agent name must not be the same as or misleadingly similar to that of an IATA Member
Airline, or IATA itself.
An Agent or any of its managers, principal shareholders (or person for whom they act as
nominees), directors or officers shall have no record of willful violations or fiduciary obligations
incurred in the course of business not be undischarged bankrupts.
Any person who holds a financial interest or a position of management shall not have been a
director, or held a position of trust in an IATA Accredited Agent that has been removed from
the IATA Agency List owing money due to default unless it is established that such persons
did not participate in the acts or omissions that caused such removal or default
LICENCE
General Qualifications
All forms of commercial companies have to be entered in the Canton Trade Register.
FINANCIALCRITERIA
Balance sheets must be in compliance with Swiss Law Code of Obligations (OR).
The time limit for submission of audited papers is within six months after the closing date of
the Fiscal year.
Document requirements:
Corporate
companies)
New legal entities without at least one years trading record: Certified Opening Balance Sheet.
The balance sheet shall at least be segmented into the following subheadings:
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Switzerland/Liechtenstein
Assets:
Liabilities:
Liquid assets
Short-term liabilities
Short-term receivables
Long-term liabilities
Equity
Fixed assets
Equity: The owners equity must not be lower than CHF 100000. If this requirement is not
met, an Agent cannot be accredited.
Formulas used for the financial evaluation:
Liquidity ratio:
Liquid assets+short-term receivables = 100%
Short-term liabilities
The liquidity ratio (quick-ratio) must attain the factor 1.0; i.e. short-term assets must cover to
100% all short-term liabilities.
When calculating the liquidity ratio, a safety margin of 10% is deducted from amounts owned
by debtors as well as from securities/bonds.
Amounts of doubtful debtors as well as money given to owners and/or managers are not
considered when calculating the liquidity ratio.
Self-financing ratio:
Owners equity x 100 = 15%
Total assets
The self-financing ratio must reach 15%, i.e. the Owners Equity must cover at least 15% of
the total assets. Subordination is looked at as equity when calculating the Owners Equity.
Fixed Assets Coverage:
Owners equity + L/T liabilities x 100 = 100%
long-term assets
The coverage ratio must attain the factor 1.0, i.e. the Owners Equity + long-term liabilities
must cover to 100% all long-term assets.
Capital Loss: When a loss is carried forward, it should not exceed 50% of the paid in capital &
legal reserve.
Any other generally accepted ratio may be applied if necessary.
335
Switzerland/Liechtenstein
Guarantees
The applicant is required to provide a bank or insurance guarantee whenever one of the
following criteria is not met:
y
y
y
y
y
Equity Capital (capital paid-in, reserves, profit and loss carried forward) is lower than
CHF1 00000
Liquidity Ratio
Capital Loss
Self-financing Ratio
Fixed Assets Coverage
As well as
y in case of high commitments referring to OR
y from all applicants where only an opening balance sheet is available.
The guarantee amount is calculated based on 60 days average IATA BSP net-turnover during
the last twelve months. The 60-days net-turnover cover monthly remittance, 40 days cover
twice a month remittance; 30 days cover four times a month remittance.
Minimum amount of bank guarantee for monthly remittance is CHF 50000.-(twice a month
remittance CHF 35000.-/ four times a month remittance CHF 25000.-).
The guarantee shall be kept for an unlimited time period and the validity should not be limited.
After two years the guarantee may be adjusted to equal 60, 40 or 30 days average annual
turnover.
If an agent wishes to be released from the guarantee it is in his responsibility to submit the
necessary financial documentation on yearly basis. After two consecutive satisfactory
financial reviews no further additional financial support in form of a guarantee will be required.
SECURITY REQUIREMENTS
The premises must meet the security standards for the safe custody of Traffic Documents. All
normal access points to the premises shall be efficiently secured with strong metal mesh or
bars. Premises shall be protected by:
y
y
336
A.
1.
b. For applicants who have just commenced trade without financial records, the
following should be submitted:
1.
2.
3.
2.
3.
b.
The financial ratios minimum levels given in paragraph A.3 must always be
met, and will be the base for deciding additional financial security requirements
(i.e. Higher Bank Guarantee, or Default Insurance Policy), as deemed
necessary by the Financial Assessor.
c.
b.
c.
337
B.
FINANCIAL SECURITIES
1.
All new applicants and accredited agencies are required to comply all the time with the
financial security requirements as decided in the locally established criteria of Syria,
even if the financial review of a new applicant and/or an accredited agency reflects
achieving or exceeding the minimum financial ratios given in Paragraph A.3.
2.
2.1
New applicants that have not yet commenced trade, or have just commenced trading,
without sales records, will be required to submit a Bank Guarantee of SYP 3.500.000
as a minimum level of financial security. The minimum level could be increased if the
ASO has reasons including financial risk.
2.2
New applicants that had commenced trade with a sales record (i.e. sales outside the
BSP umbrella) will be required to submit a Bank Guarantee of SYP 3.500.000 as a
minimum level of financial security, or Bank Guarantee levels higher than SYP
3.500.000 as decided by the ASO based on new applicant's sales record and any
other financial risk indicator assessed by the ASO.
2.3
All accredited agencies will have to undergo an annual Bank Guarantee adjustment
process, by which the ASO will communicate to each agency its highest average sales
level in 3 (three) cumulative (and not necessarily consecutive) months during the
pervious year (JAN-DEC). Agent's sales will be the guideline to assess the Bank
Guarantee. If the agent's sales exceed the Bank Guarantee by 25% (twenty five
percent) or more, the Bank Guarantee will be influentially increased by the same
percentage. This process will have no borderline limits when it comes to the Bank
Guarantee's amount. The new Bank Guarantee level will be communicated to the
concerned agencies by the ASO in JAN of each year, with a deadline to comply by no
later than 31 March or the next working day, should that date be a non-working day.
2.4
For accredited agencies with less sales record of the Bank Guarantee SYP 3.500.000,
same Bank Guarantee will be maintained.
2.5
ASO will communicate the Bank Guarantee adjustment level, only to the agency with
an increase requirement. However, Agencies have the right to request reducing the
Bank Guarantee level based on a decrease in the sales record of the previous year's
highest 3 months average sales, provided the decrease will always comply with the
minimum SYP 3.500.000 Bank Guarantee requirement.
2.6
C.
STAFFING CRITERIA
The agent must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and
report these to the BSP.
338
D.
BSP PROCEDURES
Information on the procedures and responsibilities of agents in respect of the reporting
and settlement rules is contained in the BSP Manual for agents supplied to each
approved location.
IATA offers regular BSP procedures training sessions. Any agent wishing to undertake
such training is encouraged to contact the local BSP contact to coordinate the
participation in the training sessions.
339
Financial Statements
Audited annual financial statements duly certified by a certified public accountant
disclosing airlines sales and aged debtors must be produced annually and supplied to
the ASO as follows:
(a)
2.
Guarantee
(a)
(b)
Options for all agents will be frequent remittance for a reduction of 40 % of the
guarantee.
(c)
IATA/BSP will have the right to request for additional guarantee if the average
sales exceeds by 50% during a period of any 4 months.
(d)
(e)
BSP will be mandated to remove CIPs and Traffic documents if the agent fails
to provide additional guarantees as requested.
(f)
________________
1
Cash trading means all sales less credit card sales.
Page 340
(g)
The maximum paid-up capital to be used for reduction of the guarantee will be
limited as follows:
(i)
(ii)
3.
Reduction of Guarantee
The adjustment of the guarantee amount will depend on the following:
(a)
The agent must have been an approved IATA travel agent for over 7 years.
(b)
The agent should not have more than 2 instances of irregularities for late
payment issued against the agency in the previous 12 months
(c)
(d)
The Agent must not have been in default (Due to the agent's own fault).
(e)
A change of name will not affect the Agent's record of irregularities over the
last 12 months.
(f)
(g)
(h)
4.
Default Agents
Where Default Insurance Programme (DIP) is in force, default agent(s) will be required
to provide a bank guarantee for a period of 2 years from the date of reinstatement of
credit.
Page 341
5.
New Applicants
Must have been in operation for 12 months as a travel Agent before applying for IATA
approval.
A bank guarantee will be required based as follows:
6.
(a)
Tanzania: average 4 weeks cash trading less paid up capital or USD 36,000
whichever is higher.
(b)
Uganda: average 6 weeks cash trading less paid up capital or USD 36,000
whichever is higher. Option will be fortnightly remittance for a reduction of 40%
of the guarantee.
(c)
Staff
The agent must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and
report these to the BSP.
Page 342
Thailand
THAILAND
(Effective 1 June 2011 Mail Vote OA/E19)
1. Finances
1.1 The applicant must have been legally registered as a travel agent and must have
conducted travel agent business for the past 12 months and must provide certified or
properly audited Balance Sheet and Profit and Loss account statement not older than
six months at time of submission.
1.2 An applicant
1.2(a)(i) whose place of business for which approval is sought is situated in Bangkok
Metropolitan Region (which includes Patum Thani, Nonthaburi, Nakhon Pathom,
Samut Prakan and Samut Sakhon), Chonburi (including Pattaya), Chiang Mai, Hat
Yai (Song-khla), Phuket or Rayong, must have a minimum registered capital of THB
2,000,000.00 of which a minimum of THB 1,000,000.00 must be paid up capital,
1.2(a)(ii) whose place of business for which approval is sought is not situated in any
of the locations shown in Subparagraph 1.2(a)(i) of this Paragraph must have a
minimum registered capital of THB 1,000,000.00 of which a minimum of THB
500,000.00 must be paid-up capital,
1.2(b) must submit:
1.2(b)(i) a financial guarantee equivalent to the average of 22 days turnover in year
2011 and 15 days turnover effective 2012 or THB 2,000,000.00, whichever is higher,
for an applicant whose place of business for which approval is sought is situated in
Bangkok Metropolitan Region (which includes Patum Thani, Nonthaburi, Nakhon
Pathom, Samut Prakan and Samut Sakhon), Chonburi (including Pattaya), Chiang
Mai, Hat Yai (Song-khla), Phuket or Rayong; or
1.2(b)(ii) a financial guarantee equivalent to the average of 22 days turnover in year
2011 and 15 days turnover effective 2012 or THB 1,000,000.00, whichever is the
higher, for applicant whose place of business for which approval is sought is not
situated in any of the locations shown in Subparagraph 1.2(b)(i) of this Paragraph;
1.2(c) The Bank Guarantee has to be issued by a bank with investment status rating
from Fitch Ratings (Thailand) Limited or an international rating from Standard &
Poors, Moodys or Fitch Ratings.
1.3(a) when assessing whether the applicant meets the financial standing described
in Subparagraph 1.1 of this Paragraph the following shall be taken into account:
1.3(a)(i) availability of adequate liquid funds to meet normal trading commitments;
1.3(a)(ii) capital required to be commensurate with fixed assets;
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Thailand
1.3(a)(iii) the existence of preferential claims on the assets and the existence of
contingent liabilities;
1.3(a)(iv) for applicant with previous history of default and had used Default
Insurance Program (DIP) as a means of financial guarantee, a certifying letter from
the DIP provider shall be required, stating in essence that all outstanding amounts
have been settled satisfactorily.
Page 344
Tunisia
TUNISIA
(effective 1 August 2008)
1.
Requested documents:
Fill in the IATA Accredited Agent application form in duplicate.
2.
Staff requirements:
The agent must have in its employment competent and qualified staff able to sell
international air transportation and correctly issue electronic travel documents and
report these to the BSP.
3.
Financial criteria
3.1
4.
Financial ratio due for financial assessment or review of the financial statements:
4.1
4.2
4.3
4.4
Page 345
Tunisia
For the purpose of assessment or review, the travel agency shall provide recent
financial statements (balance sheet, income statement, cash flow) duly certified by a
chartered accountant member of the Board of Chartered Accountant.
Travel agency which financial situation is considered as unsatisfactory (not meeting
the above criteria) shall provide a bank guarantee that shall be calculated in
accordance with the dispositions of paragraph 3.1.
Page 346
Turkey
TURKEY
(Effective 1 October 2011- Mail Vote A201)
Documents Required from New Applicants
Following documents are to be submitted at the application stage:
Agency Trading Licence (Isletme Belgesi) issued by the Ministry of Tourism , showing
the category A or B and type of trading - required also in change of
location/ownership/legal status/name.
Commercial Registry Gazette (Ticaret Sicil Gazetesi) containing information on
foundation, former and present addresses, shareholders, shares and paid-up capital required also in change of location/ownership/legal status/name.
Shareholder Portions Table (Hazirun Cetveli) for incorporated companies.
Steering Committee Decision Records (Yonetim Kurulu Karari), for companies having a
status other than incorporated, showing shareholder portions.
Year end balance sheet (bilanco) stamped by the Turkish tax office and P&L account
(kar / zarar hesabi). The most recent balance sheet of the current year, certified by a
financial advisor bearing an Independent Financial Advisor Certificate (Serbest Mali
Musavir Sertifikasi) and other supporting documents related to the year closing.
Certified Financial Advisor Capital Registration Report (Yeminli Mali Musavir Sermaye
Tesbit Tutanagi) and Commercial Registry Gazette (Ticaret Sicil Gazetesi) showing the
paid-up capital.
Authorised Signature Identification (Imza Sirkuleri) of the agent.
Finances
The minimum paid-up capital requirement is the TRY equivalent of USD 20,000 for
incorporated companies and USD 10,000 for limited companies.
New Applicants
Financial qualification of an applicant to become an IATA agent will be assessed as per the
following criterion:
Liquidity Ratio
Result
Equal or greater than ELIGIBLE
1
Lower than 1
DEPENDING ON ASO MANAGEMENT'S / FAG'S
DISCRETION BASED ON INVESTIGATION OF OTHER
FINANCIAL STANDING INDICATORS
Eligible candidates will be requested to submit a bank guarantee letter covering the x-day
sales average of the region calculated by the sales data of the last half-year. The x-day
sales average will be calculated as per the following method:
Page 347
Turkey
(As long as an agent's bank guarantee letter amount is higher than both its 20 days sales and
the average 20 days sales of the region, no additional bank guarantee letter adjustment is
required in specific to such STP location. The "region" above is accepted as the one having
the highest sales average among those regions where the agent has its head office or one of
its branch offices).
Definition of the regions:
Istanbul
Ankara + Bursa + Izmir
Adana
All other cities in Turkey excluding above three
Current Date
01 Jan. 30 Jun.
01 Jul. 31 Dec.
Last half-year
01 Jul. 31 Dec. period of the last year
01 Jan. 30 Jun. period of the same year
x-day
180
The candidate agent will be given maximum 60 days to provide the requested bank guarantee
and failure of submission within this period will lead to loss of eligibility.
All new applicants accredited as an IATA agent will be subject to a sales review at any time
and their bank guarantee letters will be adjusted.
The sales review will be based on the sales average of the last 3 BSP periods, and in the
case that agents sales profile will lead to an increase in the bank guarantee level, the agent
will be requested to submit an additional bank guarantee letter.
Having completed a two year of operation, the new agents will be subject to financial review
in the same manner as any other accredited agent.
Agents under Financial Review
Agents are required to supply a copy of the official balance sheet and P/L account covering
the previous Financial Year within following six months.
The amount of the bank guarantee letter will be adjusted in accordance with the data of
respective agents balance sheets, P&L accounts and other financial documents such as:
Page 348
Turkey
Liquidity Ratio*
Equal or greater
than 2
Between 1 2
Lower than 1
Net Worth
Capital
(+)
(+)
10 days
(-)
(note ***)
Unrealistic "cash in safe" values may be excluded in the calculation of the "liquidity
ratio".
**
The sales means either agents average sales or average sales of the region,
whichever is higher.
***
When the financial indicators are negative, the determination of number of days is
left upon the discretion of both the local ASO and FAG.
Further to above definitions, in the special cases of irregular and defaulter agents, the
determination of number of days is left upon the discretion of the local ASO management to
be limited maximum by 45 days.
All bank guarantee letters are to be made out in USD. Guarantees may be accepted from
Financial Institutions as defined under article 20 / 6 of the banks Act numbered 4389''.
Bank Guarantee Letter Return Conditions
The ASO management can return a certain portion of its bank guarantee letter to an agent,
provided that the agent should
have gained IATA accreditation and had the latest change of ownership minimum 3 years
prior to its bank guarantee letter return application,
be an active participant in BSP-Turkey minimum for the last 12 months,
have had no irregularity or default instance in the last 12 months.
Then the amount of the bank guarantee letter which is to be kept by the ASO management is
calculated as follows:
a) Agent's highest 2 BSP period sales in the last 12 months are taken,
b) Region's average 20 days sales is calculated,
Then the above a) or b), whichever is higher, is taken as the amount of the bank guarantee
letter to be kept by the ASO management, and the rest of the bank guarantee letter is to be
returned to the respective agent.
Page 349
Turkey
Change of Ownership
In the case that an agent is subject to a change of ownership, involving more than 30% of the
shares within any 12 month period, except those changes among already existing owners and
those transfers of shares to first-degree relatives and/or legal heirs, the level of the bank
guarantee to be requested from that agent is calculated with the same method as mentioned
under the above title "New Applicants".
Page 350
Ukraine
UKRAINE
(Effective 1 July 2011 Mail Vote A196)
New Applicants
The Agent must be in possession of a valid license / certificate to trade (if required) issued by
appropriate state authorities according to Ukrainian legislation.
Finances
The Agent shall submit audited financial statements prepared in accordance with the
Ukrainian accounting practices. The audit report should consist of
Balance Sheet
Profit and Loss Account
Auditors Conclusion
On an annual basis
Default
Changes of ownership, shareholders or legal status
Financial Guarantee
A Bank Guarantee or Insurance Bond/Certificate, issued by recognized bank/insurance
company, is required for a Head Office to cover average Amount at Risk, generated by the
Agent. Amount at Risk is calculated to the following formula based on last year turnover:
Amount at risk = 12 months revenue x (7 days reporting period + 7 days settlement + 5 days
default) / 360
but not be less than USD 100,000. The value of financial guarantee will be rounded to the
next + 5,000 USD.
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Ukraine
For Established Agents opening new branch locations for the first year of operation an
immediate increase of USD 15,000.00 per branch for existing guarantee is required, after this
period the general rule is applied.
The list of financial institutions that authorized to issue Bank Guarantee or Insurance
Bond/Certificate is specified by IATA. All financial guarantees must be drawn as per IATA
specimen.
Financial guarantee level will be reviewed annually. When the renew/reissue/increase of
Agents financial guarantee is required, the Agent must submit the original confirmation of
renewed/reissued/increased financial guarantee to the Agency Services Office latest 30 days
before expiry date of the currently valid guarantee. For Agents within first year after approval
such review will be done semiannually.
Increase of Sales Volume
Agents financial guarantee level versus actual turnover should be reviewed quarterly and
adjusted in case the Amount at Risk increases by more than 10%. An amended guarantee
has to be provided within 30 days upon the request of IATA.
Reduction of Guarantee
After two years of approval the Agent will take benefit from a Discount Scheme in respect of
the financial guarantee, if the Agent meets the following criteria:
Discount Scheme
Amount at Risk
up to USD 100,000
100,001 200,000
200,001 500,000
500,001 1,000,000
1,000,001 2,500,000
over 2,500,001
In the event of default Agent shell furnish a financial guarantee equivalent to Amount at Risk
in accordance with locally established formula prior to consideration of reinstatement.
Staff
Minimum Resolution 818g staff criteria apply.
General
In respect of the issue of Traffic Documents after approval, an Agent shall comply with the
provisions of Resolution 822 to the extent that they affect the Agent's obligations or actions.
Traffic Documents shall be completed, validated and issued only by Approved Location.
Security
Minimum Resolution 818g security standards apply.
Page 352
United Kingdom
UNITED KINGDOM
(Effective 1 June 2010 - Mail Vote A180)
Finances Applicable to New Applicants and IATA Accredited Agents
Once approved as an accredited agent, all BSP air ticket sales will be made on a credit basis.
The Agent will not need to pay for sales made until the Settlement date, which is under the
terms of the Passenger Sales Agency Agreement, the date when the Direct Debit for the
amount outstanding will be lodged and debited from the Agents bank account.
The Settlement Dates in the United Kingdom are:
y
y
The 2nd and 17th of the month following the month of sale for Agents settling their BSP
liabilities twice per calendar month.
The 17th of the month following the month of sale for Agents settling their BSP liabilities
once per calendar month.
8 days after each reporting period for Agents settling their BSP liabilities four times per
calendar month. The reporting periods are: 1-7th, 8-15th, 16-23rd and 24th to the end of the
calendar month.
With this in mind, it is important that only agents who demonstrate their ability to pay bills will
be accepted and the financial criteria have been drawn up with the objective of ensuring that
only financially sound applicants are accredited.
The financial aspect is examined in detail by IATA. The assessment is based on the
examination of a full set of the most recent audited annual accounts. Exceptionally,
companies that meet the requirements for a Small Company in accordance with the criteria
laid down by Companies House will be required to submit Certified Accounts.
Newly formed companies that have traded for less than one year must submit a copy of an
opening balance sheet, certified by a qualified accountant.
If your company is a subsidiary of another company or more than one company (Parent
Company), registered in the UK, i.e. financial control is vested in one or more UK Parent
Company(ies)) you will need to submit a copy of the most recent annual accounts of these
controlling company(ies). Such Parent Company Consolidated Accounts will be considered in
the determination of your financial standing as an Applicant or Agent.
The financial criteria fall into three areas:
(a) Share capital/capital account
(b) Profitability
(c) Liquidity
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United Kingdom
(a) Share capital (for limited companies) or Capital account (for partnerships/ sole traders)
Minimum levels for the issued and fully paid-up share capital in limited companies have been
set. For partnerships and sole traders, these levels must be reflected in the firms capital
account. There are two levels set the normal minimum for companies that have traded for
less than 3 years, and the traded minimum for companies that are able to submit 3
consecutive years accounts.
The levels are based on an average of the projected annual turnover of airline sales
(including non-IATA BSP airlines), but less credit card sales, for the first two years trading.
No exceptions are made in applying these levels, which are shown in the following table.
Less than 3 years trading
3years
Accounts
Turnover up to Normal Minimum Traded
()
Minimum ()
()
2 million
40,000
20,000
3 million
60,000
30,000
4 million
80,000
40,000
5 million
100,000
50,000
6 million
120,000
60,000
7 million
140,000
70,000
8 million
160,000
80,000
9 million
10 million
and over
180,000
90,000
200,000
100,000
(b) Profitability
Your accounts must show that you have made a profit before tax at the end of an accounting
period.
(c) Liquidity
Your accounts must indicate that you have a favourable liquidity ratio. Current assets must
exceed current liabilities at the end of an accounting period.
Bonding requirements
For new Applicants, a bond will be required if you or your Parent Company (ies) accounts
show that
(a) You do not meet either of the requirements in B or C above or
(b) Your company has traded for less than 3 years in the travel industry.
Page 354
United Kingdom
For accredited IATA Agents, a bond will be required if you or your Parent Company Accounts
show that:
(a) You do not meet either of the requirements in B or C above or
(b) You or your Parent Company(ies) undergo a significant change of ownership (see below).
A guarantee may be arranged through a bank registered in the UK, Channel Islands or Isle of
Man under the statutes of the UK/Channel Islands/Isle of Man or through Insurance Company
acceptable to IATA a list will be provided upon request.
As with share capital requirements in A above, the level of bond is based on an average of
the projected annual turnover of airline sales (including non-IATA BSP airlines) less credit
card sales, for the first two years trading.
The bonding levels are calculated to the nearest multiple of 5,000 and are subject to a
minimum of 25,000.
Bond Levels
For Agents settling their BSP liabilities once per calendar month:
Agents who have traded for
less than 3 years
16% of turnover
12% of turnover
For Agents settling their BSP liabilities twice per calendar month
Agents who have traded for
less than 3 years
8% of turnover
8% of turnover
For Agents settling their BSP liabilities four times per calendar month:
Agents who have traded for
less than 3 years
5% of turnover
5% of turnover
Page 355
United Kingdom
the equivalent), an Agent will not be required to settle as above or provide a bond/bank
guarantee.
Effect of changes of ownership on bonding
A bond will also be required (on the basis of 16% of turnover), if your company or Parent
Company(ies) undergo a complete or significant change of ownership after approval. This is
defined as a total acquisition, or a transfer exceeding 49% of the paid-up share capital,
representing a change in control.
Cumulative changes will be taken into account. The bond will continue (and may be adjusted
in line with turnover) until at least three years' accounts under the new ownership have been
submitted.
Notwithstanding the above and for the purposes of this section only, the credit rating of an
Agent obtained from a Credit Information company appointed by IATA, may be taken into
account to form a complete evaluation of the financial status and creditworthiness of an
Agent. Provided that the credit rating of an Agent is at a level of good credit worthiness (or
the equivalent), an Agent will not be required to provide a bond.
Page 356
Vietnam
VIETNAM
(Effective 1 June 2011 Mail Vote OA/E24)
1.1 The applicant must meet the financial criteria established in respect of the applicants
place of business for which approval is sought and shall provide the financial documents set
forth herein:
1.1.(a) Annual financial statements submitted to the local tax authority, for the last two years
for new applicants and one year for existing Agents.
1.1(b) With effect from 01 Jan 2012, all Agents will be required to submit audited financial
statements for the year ended 31 Dec 2011.
1.1(c) If, however, the Government authority shall mandate, before 01 Jan 2012, that audited
financial statements will be mandatory for all companies, the local regulatory requirement(s)
shall prevail.
1.2 New applicants shall provide sales report for Airlines in Vietnam for the last two years and
for current year.
1.3 The applicant must submit a minimum financial guarantee of USD 30,000 or 100% of
average two reporting periods sales for the last fiscal year, whichever is higher.
1.4(a) Criteria for evaluation of Agents Audited Financial Statements
1.4(b) Net Equity must be positive
1.4(c) Current Assets must exceed Current Liabilities (Current Ratio > 1.0).
Page 357
Western Balkans
WESTERN BALKANS
(Albania, Bosnia & Herzegovena, Kosovo, Macedonia)
(Effective 1 September 2010 Mail Vote A190)
I
New Applicants
New applicants will be required to present a bank guarantee for an amount corresponding to
an estimated 30 days cash sales. The minimum amount of a bank guarantee is 20,000 EUR.
The level of bank guarantee is checked as a minimum twice per year and adjusted if the
amount of turnover increases more then 10.000 EUR.
IATA Accredited Agents
Financial evaluation for IATA Accredited Agents in Western Balkans will be performed yearly.
All IATA Accredited Agents will be requested to submit documentation listed below.
The assessment of an existing IATA Accredited Agent must comply with the following
elements:
1.
2.
3.
If the Agent fully complies with 1. and 2. criteria, a short-term liquidity coefficient between 0,75
and 1 is acceptable.
II
DOCUMENTATION
Page 358
Western Balkans
An existing IATA accredited agent who is subject of the annual financial assessment:
1.
2.
Solvency assessment provided by all commercial banks, where the Agent has its
current accounts. Not older than 30 days. Copies acceptable.
The applicant or Agent must bear any costs related to the provision of registration and/or
financial documents
III
The level of the bank guarantee will be based on an average 30 days BSP cash sales from
the past 12 consecutive months ending with the last month for which sales information is
available. Any Agent has an option to increase its remittance frequency under the VMFR
(Voluntary More Frequent Remittance) option. The minimum amount of any bank guarantee
shall be 20,000 EUR.
The level of the bank guarantee will be checked twice per year, as a minimum and adjusted if
the average monthly amount of turnover of the last 12 months increases more than 30%.
The bank guarantee must be issued by a national bank or bank licensed by the national
authority which operates in the country of the applicant/Agent in the Western Balkans.
30 days prior to the expiration date of any valid bank guarantee, or following the annual
financial assessment, or a periodic check, IATA must inform the Agent of the new bank
guarantee amount.
Any Agent is obliged to submit a bank guarantee 30 days after it has been requested. Any
bank guarantee that does not have an unlimited validity must be valid for at least one year.
Agents will be required to provide a bank guarantee (BG) according to the following rules:
1.
Agents with an average turnover between 0 EUR and 40.000 EUR will be required to
provide a bank guarantee of 20.000 EUR.
2.
Agents with average turnover between 40.001 EUR and 100.000 EUR will be required
to provide a bank guarantee that covers 50% of their average 30 days turnover but
with the minimum amount of 20.000 EUR.
3.
Agents with average turnover between 100.001 EUR and 200.000 EUR will be
required to provide a bank guarantee that covers 40% of their average 30 days
turnover but with the minimum amount of 50.000 EUR.
4.
Agents with average turnover over 200.001 EUR will be required to provide a bank
guarantee that covers 30% of their average 30 days turnover but with the minimum
amount of 80.000 EUR.
In case that the only BSP currency is the local one and taking into consideration that BG
amounts are expressed in EUR currency, the exchange rate applied would be the National
Banks official middle rate valid on the date of the calculation.
Page 359
Western Balkans
The BG amount will be rounded up to the nearest 1.000 EUR above the amount resulting
from the calculation.
IV
Paragraphs 1, 2, 3 and 4 above, and the possibility to provide a bank guarantee based on a
reduced % of sales, will not apply in the following circumstances and Agents will be required
to provide an increase to their guarantee as below:
1)
2)
3)
This will be applied on the yearly basis by following the results of annual assessment reports
and will stay in place until the next annual assessment.
Post-default procedure/reinstatement
In case of default, an Agent is obliged to meet the requirements in order to be reinstated:
1)
2)
Page 360
Yemen
YEMEN
(Effective 31 March 2009)
Finances
Certified accounts; i.e. certified opening Balance Sheet containing expected future
productivity survey
Profit & Loss account, of not more than six months old and bank statement.
(a)
(b)
(c)
Bank Guarantee
1.
2.
Bank Guarantee
Required (USD)
70,000
100,000
150,000
250,000
350,000
450,000
500,000
3.
Page 361
Yemen
4.
2.
Agents who need to amend the level of their guarantees to submit the
amendments within one month from the notice day given by IATA.
Staff
The agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
Security
Minimum IATA security standards.
Remittance
Monthly sales must be remitted before the 15th day of the next month (e.g Sales of 01-31Jan
08 must be remitted no later than 15th Feb 08) as per IATA YE published calendar.
License
License issued by the Ministry of Tourism and the civil aviation required, showing the
category/type of trading, a commercial Registration license and a member of the Association
of Yemen Travel and Tourism Agencies.
Page 362
Zambia
ZAMBIA
Finances
For individuals trading as sole proprietors, a statement of assets and liabilities certified by an
Auditor must accompany all applications. For companies and closed corporations, audited
financial statements must be supplied.
A minimum entry-level guarantee amount will be set by the ASO, which the applicant must
comply with.
The ASO office can at any time, adjust the guarantee during the first year of operation based
on monthly Airline sales. This will provide protection to Airlines during the initial year of
trading.
Audited Annual Financial Statements must be provided to the ASO office within six months of
the Agents financial year-end.
An Agent's balance sheet should reflect certain minimum financial ratios and disclosure
standards. These are:
Solvency
Current ratio (current assets to current liabilities)
1:1 Minimum
Both debtors and creditors are to be analyzed either on the face of the balance sheet or the
notes thereto stating TRADE debtors/creditors separately. TRADE refers to those amounts
incurred as a result of the business arrangement as reflected in the PSAA.
Positive net worth/shareholders interest:
should the balance sheet indicate that the Agent is insolvent, that Agent will be suspended
from trading with immediate effect. If the position is not readdressed within 60 days, the
Agents agreement will be terminated.
Note: The subordination of the loan account does not restore the solvency of the Agency.
Profitability
Agents must operate their business with the intention of making a profit.
Guarantee
Following the submission of the initial guarantee, subsequent annual reviews and setting of
the guarantee level will be calculated as follows:
Page 363
Zambia
xxx
yyy
Guarantee required
zzz
To qualify for any further reduction in the guarantee amount as set out above the agency is to
meet the solvency criteria. The following aspects will also be considered:
The Agent must have been in business for more than 3 years
No more than 2 recorded instances of irregularities for late payment against the Agency in
the previous 12 months; and
On change of ownership, the record of irregularities in the last 12 months recorded for the
Agency falls away
The Agency has not been placed in default in the preceding 3 years of trading.
% Reduction
0-3
Nil
4-7
15%
8-10
30%
10+
50%
Note: >15 years cannot reduce lower than a minimum of 25% average four weeks cash sales
In addition, for Agencies that have been in existence for longer than 10 years (as an IATA
Agent) and comply with the above criteria, will be able to apply for a minimum guarantee level
of 25% of average four weeks cash sales if their financial statements comply with the
following:
In the first year following a change of ownership of the legal entity the agency will not be
entitled to the reduction in guarantee as calculated in above. The agency will qualify the for
the years in business reduction from the second year after the change.
The guarantees may only be issued by:
Page 364
Zambia
Staff Criteria
The Agent must have in its employment competent and qualified staff able to sell international
air transportation and correctly issue electronic travel documents and report these to the BSP.
BSP Procedures
Information on the procedures and responsibilities of agents in respect of the reporting and
settlement rules is contained in the BSP Manual for Agents supplied to each Approved
Location.
IATA offers regular BSP procedural training sessions. Any agent wishing to undertake such
training is encouraged to contact the local BSP office.
Page 365
Zimbabwe
ZIMBABWE
Finances
For travel agents (sole proprietors, companies and close corporations) which DO NOT have a
statutory requirement that an audit is to be performed, MUST submit to the Agency Services
Office (ASO) the Approved Summary Document completed by an accountant registered with
the PAAB (Public Accounting & Auditors Board) in Zimbabwe, along with the Annual Financial
Statements of the agent. For all other agents Audited Financial Statements MUST be
submitted to the ASO. The Audited financial statements must be submitted within six months
of the agent's financial year-end.
An administrative charge of ZAR 1000 per week (equivalent in ZWD at the official RBZ rate)
will be levied on agents who will not have submitted their financial statements by the deadline
and billed via ADM on the bi-monthly billing. The agent may have up to 60 days (see
Resolution 814 Attachment A, Section 2.4.1(a)(ii) to comply and pay admin fee after which
time agent will be placed on cash basis.
The summary document is to appear on the letterhead of the Accountant who MUST be
qualified and registered with the Public Accountants and Auditors Board of Zimbabwe
(PAABZ).
Proof of their registration by way of a certified copy of their registration certificate should be
attached to the summary.
The Summary Document should clearly state:
We, the undersigned, in our capacity as Accountants for (xyz Agents) do hereby confirm that,
at this date:
1.
The annual financial statements have been prepared by ourselves in accordance with
International Accounting Standards (except for IAS 29 Financial Reporting in
Hyperinflationary Economies).
2.
3.
We have performed adequate procedures to confirm that the book debts as reflected
in the annual financial statements are in our opinion good and recoverable.
4.
We have verified the value of fixed assets as at year-end and confirm that the
appropriate depreciation charge has been booked in the financial statements.
5.
We have verified that no development costs have been capitalized as part of the
reported fixed assets in the financial statements.
6.
We have confirmed with the agent's legal advisors regarding any outstanding claims
against the agent and these have been adequately provided for in the financial
statements.
7.
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Zimbabwe
8.
(i)
(ii)
All income including foreign currency and Zimbabwe Dollars has been declared
in the financials.
(iii)
The amount of cash on hand reflected in the balance sheet represents all cash,
cheques and all similar monetary items physically in possession of the
company.
(iv)
The financial statements fairly present the state of affairs of the company and
nothing that can affect such fair presentation occurred since that date.
The minimum for new IATA Applicants will be USD 65,000 or the equivalent in
Zimbabwe dollars at the official rate published by the Reserve Bank of Zimbabwe. The
ASO office can vary this guarantee during the first year of operation based on monthly
airlines sales. This will provide protection to Airlines during the initial year of trading.
The minimum guarantee for existing agents will be USD 20,000 or the equivalent in
Zimbabwe dollars at the official rate published by the Reserve Bank of Zimbabwe.
Solvency
Ratios:
An agent's balance sheet should demonstrate certain minimum financial ratios and disclosure
standards. These ratios are mandatory regardless of whether the financial statements are
audited or summarized. The ratios are as follows:
% Bad Debt write-off: (this ratio would indicate whether the agent has a record of
doing business with customers which it should not be) FORMULA: Bad debts/sales
revenue. This should be a maximum of 10% ELSE guarantee amount should equal
average 6-week sales.
Age Debtors % book debts older than 60 days: (this ratio will indicate whether the
agent is providing adequately for older/suspect accounts which may not be
recoverable.) If more than 20% are older than 60 days then the guarantee amount
should equal average 6-week sales. In this regard the accountant completing the
financial statements will at his/her discretion seek a debtors circularization.
Debtors turnover (this ratio will indicate how regularly customers are paying): TOTAL
trade debtors/TOTAL sales revenue (NOT NET)*365. If more than 60 days, guarantee
amount should equal average 6 week sales.
Current ratio: current assets over current liabilities. In this regard the accountant is
required to seek independent verification of bank balances and provide this with the
financial statements. If this ratio is less than 1:1 the guarantee will be equal to the
average 6-week cash sales.
Page 367
Zimbabwe
Gearing Ratio: this is to establish the level of the debt to equity of the business and is
calculated as follows: - Equity (i.e. share capital, retained earnings and nondistributable reserves) over long-term liabilities.
If the agency complies with all the criteria above they will be assessed based on the
financial criteria set below.
The Accounts should depict a positive net worth/shareholders interest (ignoring intangible
assets). Should the balance sheet indicate that the agent is insolvent, that agent will be
suspended with immediate effect. If the position is not readdressed within 60 days, action will
be taken in accordance with applicable resolutions. The subordination of the loan account
does not restore the solvency of the Agency.
Defaults
Any new agent who defaults twice within any six-month period of their first year of trading will
be suspended for a period of six months.
Profitability
Agents should operate their business with the intention to produce profit.
Guarantee
From an airline's perspective, it is important to provide for a method that will ensure that funds
collected by agents from sales of airline tickets will be reasonably protected. This has taken
the form of the guarantee, which Agent has to obtain.
The Guarantee amount, following one year of trading, is set as follows:
Average six weeks' cash trading
over the last 6 months per BSP
xxx
xx
= Guarantee required
yy
The guarantee required is thus reduced by profitability and sound financial management as
evidenced by a business whose balance sheet meets the solvency/ratio requirements
outlined above.
The guarantee amount as calculated above is adjusted to take account of the twice a month
remittance frequency in Zimbabwe. The guarantee must be issued by one of the following
only:
A registered bank in terms of the statute of the land;
or
An insurance company acceptable to the ASO (the ASO to provide a list of acceptable
insurance companies from time to time).
The guarantee/acceptable insurance bond must be written exactly as per the IATA Guarantee
Specimen and should not have an expiry date.
Page 368
Zimbabwe
Guarantees will be reviewed twice annually: June & December, however in the event of a
devaluation or change in the exchange rate by the Central Bank of Zimbabwe of 50% or
more, then an immediate interim review would be undertaken.
Special provision has been made for reduction in the Guarantee amount as set out above.
The adjustment of the guarantee amount will depend on:
The agent must have been accredited with IATA for 5 years
No more than a maximum of 2 instances of irregularities for late payment may
have been issued against the Agency in the previous 12 months; and
The Agency must not have been in default within the previous 5 years. The
reduction in the guarantee will be as follows:
% Reduction
0%
10%
20%
30%
40%
50%
In the first year following a change of ownership of legal entity the agency will not be
entitled to the reduction in guarantee as referred above. Similarly agents who have
more than 30% change of share holding will not qualify for reduction. Such agents will
qualify for the 'years in business' reduction from the second year after the change.
Guarantee deadline submission dates are as follows:
Administrative Requirements
All new and existing agents are required to be fully automated and must have in place the
following:
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